Management Information Systems

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Unit 8
Structure: 8.1 Introduction Objectives 8.2

Business Process Re-engineering

Organisation and Business Process Reengineering 8.2.1 8.2.2 8.2.3 8.2.4 8.2.5 Definition and Approach Business process Process model of the Organisation Value stream model of organisation Self Assessment Questions (For Section 8.2)

8.3

Redesigning of Processes 8.3.1 8.3.2 8.3.3 8.3.4 What delays the business process? Relevance of Information Technology (IT) MIS and BPR Self Assessment Questions (For Section 8.3)

8.4 8.5 8.6 8.7

Summary Terminal Questions Multiple Choice Questions Answers to SAQs, TQs and MCQ

8.1 Introduction
In this unit, we would start with the definition and meaning of Business process reengineering. Then we analyze the business process and value stream model of organisation. We conclude the unit with the relevance of IT and the link with BPR and MIS.

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Objectives: At the end of this unit, you should be able to Define Business Process management Understand business process and its elements Explain value stream model of organization Relevance of IT in BPR How MIS and BPR are linked

8.2 Organisation and Business Process Reengineering

8.2.1 Definition and Approach Michael Hammer defines re-engineering as 'the fundamental rethinking and radical redesign of Business process to achieve dramatic improvements in the critical contemporary measures of performance such as cost, quality, service and speed'. The approach to re-engineering aims at customer focus. It requires one to take a different view of the business-the view based on the process and not on the tasks or functions. It requires organisation restructuring and redesigning based on the process, which terminates at the customer door contributing to the value desired by the customer. The definition of re-engineering is loaded with a number of important concepts and its understanding is necessary for successful re-engineering of business. The first and the foremost is fundamental rethinking. The fundamental rethinking calls for questioning everything that is being followed, practiced and found acceptable for centuries. It rejects old legacies and 'proven' practices. For example, one can question the necessity of an invoice for billing and recovery of money. Is there any other way whereby the sales transaction can be registered and money recovered without raising the invoice document. It requires questioning on the basic principles of
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management and administration which are used for decades. The old principles like when it is a money matter it is for finance and accounts to handle, when it is a matter of quality it is the responsibility of the quality assurance department, etc. are to be rejected. The fundamental rethinking calls for starting all over again rejecting the past. It requires a vision, an innovation and an imagination. Radical redesign is the second important concept used in the definition of re-engineering. For example, the business is conducted in a certain manner, i.e., you buy raw material, process it, pack the finished goods, sell and distribute the goods to the customer. There are standard procedures and designs for these activities. The radical redesign calls for trimming and chopping of these designs so that the cost is reduced, service is improved and the customer gets higher value at a higher speed. The redesign calls for a change in the technology, tools and techniques. It calls for pushing down decision making to the lowest level by enlightening and empowering the people. The radical redesign calls for off-loading the activity outside the business organisation if it contributes to the cost and not to the customer desired value. It begins with the objective of activity elimination, then improvisation and finally outsourcing. It suggests only to do what can be done best, and rest to be done through outsource. The fundamental rethinking and radical redesign' mentioned in the definition is that exercise which produces dramatic improvements. Any re-engineering exercise, if it produces only marginal improvements is then not a result of fundamental rethinking and a radical redesign. The conventional approach of organisation development, work study, automation, mechanization, computerization, value engineering and so on
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do not fall into this basic approach to reengineering. The improvement that re-engineering expects to generate is to set a new benchmark. The new benchmark may replace the cost, quality, service and the speed at which it delivers. When the re-engineering exercise is complete, the organisation will have fewer people, less space a product or service of excellence and highest customer satisfaction. It will further generate and. frame new rules of the business game. The new rules will force one to think in terms of 'process and not tasks or functions. The new rules will consider the customer for whom the organisation and the business is established. The business and its management in terms of marketing, production, sales and accounting functions will be replaced by the 'management of processes' which starts in the organisation and end at the customer door. It calls for new rules of business to manage the multiple processes, resulting into the value in which the customer is interested. The organisation will now be described using processes running across the departments and functions. The process thinking and multiple process integration will make the organisation seamless. The flow of information will be free from barriers. The organisation chart of the business will not be shown with the hierarchical structure of people bound by functions but it will be described in the hierarchical structure of processes, i.e., the main process and the sub processes which contribute to the result of the main process. The re-engineering exercise will measure the process efficiency and effectiveness of the existing processes and bring in a dramatic improvement in all the performance criteria of business such as the cost, the quality, the service and the speed of delivery. It will retain mainly those processes which affect the contemporary measures of performance and conduct them in such a manner to produce an additional value to the customer.
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Business re-engineering requires a major change in the mindset. In the present world, business performance is measured in terms of order book, turnover, inventory, payables and receivables, etc. It is analyzed based on cost, overheads, customer complaints, pending orders and queries. These measures and methods, though not wrong, are not meaningful in the present competitive business world. For example, the order book may be full if it takes a long time to process the order but the business is exposed to the risk of not getting the repeat business orders. What is required by re-engineering is a change of focus, from physical aspect to time aspect of the business. Instead of orders, order processing cycle time is important. Procuring the right material of the right quality is important but how soon can the material be procured is vital. The procurement cycle from the requisition of material to physical arrival of the material is important. The shorter the cycle time, lesser the stocks and lesser the cost of procurement. The business should be thought in terms of time and process cycle time. Whatever is done, it has to be done in the shortest possible time. The units of measuring time will gradually shift from week to day, day to hour, hour to minute and minute to nano second. Another change would be in measuring the performance of business in terms of customer satisfaction. Customer satisfaction would be highest if the price paid by the customer is convincingly appropriate for the value the product or service offers and there is no better option elsewhere. Customer satisfaction would be measured now not by the number of complaints, which in any case should be few, but how quickly the customer problem is solved and his service expectations fulfilled. Fast response whether it is order delivery or complaint handling is what the customer is looking for and is what the organisation should provide.

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Another radical change in the mind set is from the cost and overhead to the performance cost. When cost is to be controlled so that it is affordable to the customer, the planning should be in terms of direct cost of execution of business. The direct cost is material and labour. While the cost of execution is the aggregate of all the costs incurred in the business processes directly associated with or supportive to the main activity of converting the raw material into the finished goods. Hence, the cost of the order processing, procurement, storage, delivery, distribution, communication, general

administration, etc. is the costs of the business execution. The mindset should change from direct cost to this cost of business performance. The reason for the emphasis on this point is that all the organizations take efforts to control the direct cost through change in the product design and the technology, use of better materials, tools and techniques. But adequate attention is not paid to the cost of business execution, though this cost does not add any additional value to the customer. The fundamental redesign of the business processes requires a significant change in the mindset of the people across the organisation. The reengineering of business calls for a change in the management philosophy. The business strategy should be competitive rather than protective to maintain leadership and growth. It should be such that it keeps the organisation under a constant state of alert. These are the times when like an earthquake, the product will be replaced suddenly; or overnight, a new technology would bring down the cost; or the business will be threatened by an altogether new development and so on. Another change in the management philosophy should be from delegation to empowerment down the line. The relationship should be based on trust and not on command control principle. Once the business has been reengineered the management thinking would be oriented towards customer
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satisfaction. The focus would shift from the management of the company to the management of corporate relations between the management, the suppliers and the customers. These relations would be of business partner, much more than just contractual and legal. The relations should be such that they support the mission and the goals of the organisation. The management of the organisation would boldly and openly express these relations as an asset of the organisation. These relations would take shape in the arrangement such as an alliance, a franchise strengthening the endeavor of the organisation to service the customer. Michael Hammer's definition is comprehensive to cover all these aspects of change. Dramatic improvements are possible only if there is change in the mindset and the management philosophy in tune with the requirements of business. Re-engineering calls for a change in the performance measures. The traditional performance measures, viz., the cost, quality, productivity, efficiency, overheads and many others are useful but would not be relevant in the coming decades. For example, there is no doubt that the cost of production should be less and less than that of the competitors. But now this is not sufficient. The correct measure would be the value it generates for the customers. The question is, are you competitive on the 'value'? Yet another important measure, the' quality' also needs different interpretation. It is imperative that the management should ensure the quality the product is claimed to have. But the real measure is whether the quality fulfils the expected satisfaction of the customer. The concentration on the productivity is necessary but the emphasis should be on the process productivity and not on the task or the function productivity. For example, the productivity of the order processing task in the marketing department is not important.
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Productivity can be improved by various methods but still the customer receives the delivery of the product very late. Hence for the productivity gain, the entire process of the order receipt to the delivery and recovery of money should be considered. The focus should be on process productivity where the process terminates at the customer end. The same is true of overheads. The control of overheads should be exercised on the process and not on the functions. Market share is also an important yardstick. The market should be measured in terms of the share in niche and not as a percentage in the large segment. Measuring the sales in a niche in itself has a very sharp focus. Instead of delivery promise, the appropriate measure would be service fulfillment. The service is all comprehensive measure than just the delivery promise. In short, traditional measures like the cost, quality, productivity and efficiency which are all task-based should be measured for the process. Further, the change is from cost to value, quality to satisfaction, efficiency to effectiveness and productivity to performance. The significant addition to the traditional performance measures is the knowledge resource. It is not very important as to how many people are engaged in the business though undoubtedly, their number needs to be controlled. What is important is how much knowledge they have about the various aspects of business. It is not the number but the quality and the level of knowledge they have. The business in the coming decades will largely depend on the knowledge the people have. If knowledge is inadequate, outdated and irrelevant, then the management is running a high risk business. The learning ability of people will build the knowledge resource.
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Traditional performance measures will continue to play important role as before. But when it comes to comparison with others, the new measures suggested here are critical and important. Table 8.1 gives the business performance measures-traditional to modern form.
Table 8.1: Business Performance Measure Traditional Cost Quality Productivity Market Segment Task Productivity Efficiency Delivery Promise Function Overheads Human Resource Modern Value Satisfaction Performance Niche Process Productivity Effectiveness Service Fulfillment Process Overheads Knowledge Resource

8.2.2 Business process For initiating business re-engineering, one is required to make some very basic and fund a- mental changes in one's conventional thinking. The business is re-engineered through process reengineering and the business has a number of processes which together produce the business results. You concentrate on the 'process' and not on the task when it comes to reengineering. The business process is defined as 'a set of activities performed across the organisation creating an output of value to the customer'. Every process has a customer who may be internal or external to the organisation. The scope of the process runs across the departments and functions and ends up in substantial value addition which can be measured against the value expectation of a customer.
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For example, the order processing scope in the traditional sense is within the marketing department. But when it comes to re-engineering, the scope expands to manufacturing, storing, delivering and recovering the money. Likewise, the scope of the bill payment is not limited to the accounts and finance departments but it covers ordering the vendors, receipt and acceptance or goods and paying the bill amount. In a classical organisational set-up, the different processes are handled in parts within the four walls of the department and the functions are limited to the responsibility assigned to them. When the bill payment process is to be re-engineered, it will be re-engineered right from the purchase ordering to cheque payment to the vendor. The reason for covering the purchase ordering as a part of the bill payment process, is that the purchase order information decides the number of aspects of bill payment. The basic element of the processes is motivation to perform certain activities. In the process execution, the data is gathered, processed and stored. The data is used in the process to generate the information which would be checked, validated and used for decision making. The decision is then communicated. The process is executed through the basic steps such as receiving the input, measuring the input, analysing the document, performing, processing, recording, accessing data, producing the results and communicating them. Basic elements of business process are: Motivation to perform Data gathering, processing and storing Information processing Checking, validating and control Decision making Communication
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All these relate to human initiative. A business process in any area of the business organisation performs through basic steps, such as, receive input, measure, analyze, document, perform, process, record / store, access, produce and communicate. These steps are performed a number of times across the execution process. When the process is performed, it consumes resources and time. The reengineering approach attempts to eliminate or shorten the steps so that resource consumption is reduced and time of process execution is shortened. It eliminates redundancy by eliminating the steps, which do not contribute, to the value customer is looking for. A business process defined for re-engineering has a clear cut 'start and end', resulting into a business result. In organisation, there are long processes and short processes. There are critical processes and not so critical processes. The critical business processes are those, which contribute to the value significantly. While the non-critical processes do not contribute much to the value, the customer is looking for. For example, the process of receiving a visitor in the organisation could be considered as noncritical. But the process of new product development from the concept to the prototype is critical as it is expected to contribute high value to the customer. If the external customer focus is taken as a criterion for process selection, then all the processes which generate and add value to the customer are called the value stream processes. The value stream processes are critical and become the immediate candidates for reengineering. The other processes in the organisation contribute to the overheads of performing the business function. For example, the processes involving attendance, leave, payment of wages, security, travelling and accounting are not value stream processes as the resources employed in them do not create a value or improve a value to the customer. Such
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processes are a second priority as far as re-engineering is concerned. Every process is made of a series of activities. In each activity some 'work' is done which produces some result for processing into the next activity. If the work done under any activity is analyzed, it will be seen that the people are moving papers and products to achieve some result. In the process they collect the information for decision making and then carry out a physical activity of pushing the product or the output using the paper for record, document and communication.

Fig. 8.1: Work model

Figure 8.1 shows this work model comprising six elements. The people who manage the business are engaged in the series of such work modules distributed across the organisation. When such work modules are viewed together as a single entity, it is a business process. In such process, participating people are considered as a team working with the sole objective of achieving the customer expectation on value. In reengineering exercise all the six entities, viz., people, paper, activity, information, decision and product stand to scrutiny through a fundamental rethinking for radical redesign to produce dramatic results. 8.2.3 Process model of the Organisation The re-engineering initiative begins with viewing the organisation through the processes and not by the tasks or functions. As discussed earlier,
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process runs across the department of the functions where the department or the function heads hold same or similar positions at par in the organisation structure. A process may begin in one department and run across other departments producing a business result of some value. The process is handled by a number of people having different status in the organisation. They are backed by authority, rules, and powers within the scope of function of the department they are handling. The classical organisation model is recast on the basis of processes ignoring the people hierarchy. The stimulus to activate the process could be external or internal and it flows across the departments where the data is gathered, analyzed, processed, the decisions are taken and the

intermediate results are passed on to the next stage for further processing. The process model of the organisation considers only those processes where the' end' of each process produces a result whereby the customer concern, interest, expectation and perception are affected. It considers only those processes which produce value for the customer. For constructing the process model, the processes which are essential for the smooth working of the business such as the employee related processes, audit, budgeting and accounting, security, canteen, general administration, etc., are not considered. Such processes contribute to substantial overheads and could be considered for cost control leading to the price reduction under the reengineering methodology. The need for constructing a process model of the organisation is to force some fundamental thinking, and redesigning that will bring a dramatic change in the working and the end result of the organisation. It will not permit thinking on the task basis within the confines of the function or department. Every activity in the process will be evaluated from the stand point of an ultimate result. It will help to redesign the process in terms of
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input, process and effectiveness and productivity. The process view of the organisation will prevent functional and local suboptimisation, and promote process optimization, where the resources are used intelligently and the productivity is the highest. Once the process view of the organisation is taken, the old conventions and practices of business processing undergo a radical change. The change breaks the hierarchy, and removes the barriers on the access and use of information. It deviates from the command control system to a system of work group called as team. The team members are at par and perform as equals. As a team member their role is self contained and complete in every respect. They are empowered fully to perform at the stage where they are mobilized and do not have to seek approval or sanction elsewhere. They lose their function or departmental identity as a team member. The managerial or supervisory role is abandoned and replaced by a role of facilitator. The team is not a committee where the subject is discussed, analyzed and the decision alternatives recommended for approval and sanction. The work group culture is a radical cultural change in the working of the organisation where the information technology plays a significant role. 8.2.4 Value stream model of organisation The organisation is established to fulfill customer needs, having associated customer values. The value is a measure, an intangible measure, which is difficult to count in clear terms or specifications as different customers have different value priorities, value mix and buying decision criteria. However, if the value expectations are fulfilled, the customer satisfaction is automatic. The customer is satisfied when he believes that the price paid by him fulfils the value expectations. The value is an intangible concept and the customer has his own perceptions on the value. The customer puts value based on
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which he evaluates the product or the service on about twenty-one parameters. He may consider all the parameters or only a few of them for his buying decision. The business organisation, however, has to decide which customer segment it will like to serve and then evolve various business strategies. The organisation is required to design such processes, which will fulfill the basic needs of the customer by producing a product, which will satisfy the value perceptions of the customer. Depending upon the value choice of the customer, the processes of the organisation become critical and relevant. Only these critical processes really matter for business success in terms of survival, growth, leadership and competitive advantage. The process model, therefore, can be seen as a value stream model, relevant to the organisation. For example, an organisation in food business will consider those processes critical and relevant which produce food products fulfilling basic needs of appetite and taste and meets the value expectations on availability, perceived belief, packaging, price, and ease of access. Every organisation, therefore, must identify value streams in the process model consistent with the business, the goods manufactured and the nature of business and its objectives. All organizations have some processes that are critical from value viewpoint. For example, order processing, procurement processing, manufacturing, delivery, customer relations and product development and design are value streams in any process model. Processes like invoicing, recovery, bill payment, supplier relations; communication processes etc. are the secondary processes that support value delivery to the customer. All these processes deal with some aspect of business, which affect the cost, the quality, the service and the speed. Further, these processes create a competitive and strategic environment and clear customer focus. These processes, if redesigned properly, give sustainable business advantage to
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the organisation. They give clear guidelines where the organisation should invest for high returns in business through re-engineering. Once the process model and the value stream model is built, the process organisation can be implemented. In the process execution, people come together to form a work group. The work group, as a team, executes a complete process cycle. To improve the performance of the team a number of measures are used. On the technology front, the team uses information technology extensively. It facilitates freeing data from ownership. It is put into database, which is designed, independent of its application or use. The access is free to all concerned but at the same time it is secured properly to prevent unauthorized access to the information. In the information technology application, the team members stay where they are but work or. the information database to achieve the desired result. Due to information technology usage, the data search is faster, the analysis quicker, the decision making intelligent and purposeful and information update instantaneous. The whole process is faster making human resource more efficient and productive. While building the process organisation, the people in the team are empowered to make decision through education, training and support. They are supported by a knowledge database and decision support systems. The extensive use of Expert and AI systems is made to improve the decision making process and the decision quality. When the information technology is embedded into the process, the organisation becomes seamless with free information flow. All value streams are linked through the information paths installed on Local Area Networks and the Wide Area Networks. For the effective process organisation build, it is necessary to normalize the processes by segregating them based on internal and external customers.
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The processes should then be scrutinized by questioning the Philosophy, Policy, Pride, Procedure, and Practices followed by management over a period. The existing processes shall be redesigned if they suffer from defective philosophy, policy and rules. The use of information technology, keeping the existing processes as it is, would make them faster no doubt but they would continue to be inefficient. Some processes should be considered for sub-contracting or outsourcing if they fall in the area outside core competency. The processes in which the staff is best in all respects should be retained in the organisation, rest all should be commissioned outside. In other words, suppliers and customers should be made business partners so that they work for achieving common business goals. The relationship between the suppliers and customers should be such that they cooperate and participate in the processes as equal partners and team members. All these arrangements and changes should be tested based on value improvement. The changes in process design must cut down the cost, improve the quality, and make the delivery faster and response to the changing needs of the customer quicker. The broad steps of building the process organisation are as follows: Motivation to perform Free Data/Information from ownership Build seamless information flow Provide access unlimited Empower person(s) through support Recast business operations into process (Client and Server) Designate process managers Segregate processes where customer is internal, from external Take the process beyond the organisation
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Think in terms of business partners / associates and not as buyers and sellers Retain only those processes which contribute to the value to the customer and subcontract others

Since the people in the process are empowered themselves, the organisation will have less or no bureaucracy and hierarchy. Hence, delayering will make the organisation slim. and efficient. The re-engineered process organisation will have process managers, knowledgeable workers using smarter machines, smarter products and an intelligent software. Building process organisation is a complex job of implementing a change, which requires careful handling of a number of issues simultaneously. The issues are related to the choice of technology, human resource management and defining the business and its scope for the organization. The change will affect the work culture and management philosophy. The knowledge will become impersonal and available to all. The power structure would break the spirit of authority and the dominance will be replaced by cooperation and a participative affinity. All will have a common goal of realizing customer satisfaction. The re-engineered process organisation will have less people using very little space. The process will be transparent and results will be visible. The organisation will be flexible and responsive to the customer needs. It will be managed by people of vision capable of producing innovative ideas and possessing a high tendency to change. The exercise of the process organisation building begins from the top management group whose initiative and commitment to re-engineering matters and is inevitable. The willingness to do some fundamental thinking and redesigning radically is a key to success. Table 8.2 shows the approach to select re-engineering opportunities.
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8.2.5 Self Assessment Questions (Section 8.2) 1. What do you understand by the term Business process Reengineering? How does it differ from the traditional concepts. 2. Explain with relevant example the concept of business process. Also mention their elements 3. Explain the value stream model of the organisation.

8.3 Redesigning of Processes

8.3.1 What delays the business process? A business process is complex and lengthy, and if conventionally designed and implemented on functional lines, a number of processing steps are repeated across the process. The process operators repeatedly search, access, refers, compute, and analyze the same data or a set of the data in different contexts across the process for achieving the local objectives of the department or function. This increases the process cycle time. The information technology capabilities can be put to use while redesigning the process so that such repetition is eliminated and all the decisions covering all aspects of the business are settled in one stroke, saving the process time considerably. The number of steps in any business process related to the data search, its matching, collating, validating, confirming and conforming are carried out only once in the redesigned process with the help of information technology. Through this process, a typical business transaction is settled for acceptance, fulfilling various other needs outside that process in the organisation. For example, the receipt of goods, a transaction when processed with the information technology application, settles a number of aspects of this one transaction. The aspects are whether: a) the receipt is against the valid purchase order,
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b) goods received are as per specifications both in terms of quality and quantity, c) the terms and conditions of supplies are fully met, d) the value declarations are correct and complete, and e) amount payable is computed and kept ready for confirmation through the bill of the supplier. Since all such aspects with the variations are settled at one place in one stroke, the dependent steps in the rest of the business functions are expedited reducing the total process cycle time. The modem information technology provides intelligent capabilities to incorporate business rules in the application system, whereby the decision making at all levels can be rationalized, normalized and expedited. Though using these capabilities, the information technology uses its own data and knowledge bases for decisionmaking. In the conventional functional processing, a transaction awaits for scrutiny, analysis and approval by the decision maker. If all methods of scrutiny, analysis, approval, and decision-making are put in the redesigned process using information technology capabilities the time taken in the transaction and processing is saved. The delays arising out of queuing and hold up due to the absence of the decision maker, the time taken for signatures and counter signatures, filling and updating the records, and communication to all the concerned agencies are saved reducing the process cycle time. The entire business process is normalized by removing the decision makers and giving their role to the information technology. The process team members perform a wider comprehensive role in the information technology dominated redesigned business process. IT is capable of triggering the action if certain conditions framed by the management in terms of the policy, rule, formula and procedure are
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satisfied. IT is capable of analyzing the situation created by a business transaction and further interpreting the transaction results in terms of the policy and rules and then triggering action at various points. The action may call for generation of documents or communication to the concerned agencies for the knowledge and action, if necessary. Taking the example of receipt of goods once again, the Information Technology helps to generate the goods rejection note for the information of the suppliers. If the goods are accepted, it updates the purchase order status, the stock status and generates an indent for material issue. It will give an effect in the accounts payable as per due date and generate payment voucher for accounting and cheque for payment to the supplier. The information technology is capable of handling progressive updation and documentation of a transaction. It can handle first the receipt of goods, then in warding, and the acceptance followed by inspection. At each stage, no separate document is generated. The information technology provides the capability of updating a receipt transaction in stages with the appropriate comments or remarks. This saves paper flow and delay due to nonattendance of documents. The issues revolving around secrecy, confidentiality and safety of the data and information can also be handled effectively using IT. In the conventional approach of processing, such data is kept under the custody of the senior people in the organisation and its availability is person-dependent. The information technology provides the capability of handling this aspect of the information whereby the access, usage, and update rights can be given to selected trained people and the system keeps an account of its use in all aspects-who, when, why and from which location. The use of this capability reduces bureaucratic dependence on the senior person in the hierarchy or the authority reducing the processing time.
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The modem information technology provides very powerful communication facilities with no limitation of distance. The hardware and the software heterogeneity does not pose any problems. Communication is possible in all media-text, voice, image and video, etc. The inputs in these media are possible to handle without regard to the distance. Video conferencing, multimedia processing, Electronic Data Interchange and E-mail has made it possible to process any input at any location and transfer the output in any medium to the other location. The swift and versatile communication capabilities cut down not only the mailing time but also provides facilities for follow-up, message processing and action. In the functional approach, when the business process is complex due to the business rules and methodology, it is handled by breaking the process in a series of smaller tasks and connecting them by information linkage or decoupling them by providing the data and information in the stored form. This causes a delay in processing and tackling a transaction efficiently and effectively. The information technology can handle such complexity in the business world through the business performance rules embedded into the process and in its information system. Since, the rules and the business intelligence is an integral part of the redesigned process, a transaction, simple or complex, gets processed very fast independent of the location, person, or position, and no delays are experienced in handling a complex business transaction. The storage capacity has no limitation and the hardware-software capability is no problem in IT. It is possible to distribute appropriate information technology facilities at different locations and connect them in a network. With these facilities, the database can be distributed at the different locations and still can be viewed and used as one database. The facilities are capable of handling private and public databases to provide information
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to the decision makers. With this technology, processes need not wait for the data or information, they can be redesigned to access and take any information from any other distributed database. The integration of all types of data for business processing is possible, if the process is redesigned to meet the enterprise requirement. The working of the organisation is made seamless and transparent to all by the information technology and its working can be changed keeping in view the supplier and the customer needs. The processing can be redesigned in such a way that the systems in the organisation and that of the supplier or the customer can communicate directly to each other. With this possibility data, message and document transfer to the supplier or the customer is easily possible without any time delay. For example, it is possible to cut down drastically the new product advertisement processing time. The advertising firm can design and develop the advertisement on their system and send the same to the system of the client for viewing, study and suggestions. The client performs this task and transfers the advertisement to the firm for further processing. The delay arising out of mailing, discussion, etc. is considerably cut down. Since, the redesigned process would extensively use the information technology, the people intervention for consultation, advice, approval, sanction, decision making and opinion seeking is eliminated, reducing the process cycle time. The hierarchy in the organisation is reduced eliminating the bureaucratic interference. At each stage in the redesigned process the functional tools, knowledge, know-how, and skills are provided. Each process stage is complete and self reliant. In the conventional process design, the process operators acted as individuals in isolation creating the barriers in movement of papers and information. The capabilities of the Information Technology enable the
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organisation to redesign the processes for a team of persons working for a common goal and customer satisfaction. Since, the redesigned process with Information Technology support will be response driven, it is possible for the team leader or manager acting as a facilitator to take quick action, if the process is showing signs of inefficiency and ineffectiveness. Since, the information technology can analyse and identify the 'where, when and why' of the delay in the process, the team members are motivated to work for the elimination of delay and to achieve superior business process results. The information technology needs intelligent handling and application for redesigning the process. The capability of the information technology is phenomenally higher and assures dramatic results in the cost, time, service and delivery. It increases the people productivity and process effectiveness. The information technology, therefore, is a very strong potential enabler in the business process re-engineering. 8.3.2 Relevance of Information Technology (IT) It is experienced that the role of the information technology as an enabler is very important and significant in re-engineering. Its contribution, compared to other technologies to the radical redesigning of the process is maximum. The range of technologies in all fields, based on the microprocessor applications affect a number of factors of the business processes. Any business process in the course of execution gathers and processes the data and stores it for further use. The business process requires the formation and its analysis for decisionmaking. In the course of execution, it checks, validates and controls a number of aspects of the business process before taking a decision for implementation. It performs the validating, checking, computing,

communicating and processing at a mind-boggling speed and precision.

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The search capabilities of the IT are so versatile that an unknown entity can be searched with a limited or a hazy clue. Since, the speed is very high, such search is handled with the quick access capabilities. Similarly, IT provides storage capabilities in a number of ways. There are different media to store the data and information. The storage of the data can be structured around the hardware and software. It is possible to store data in a distributed order in different locations and still be one database in the whole organisation sharable by all. It is possible to process the data at one location and effect the update at other different locations. The data can be an on-line data or an off-line data as the need be. The capacity of the storage medium is very high. Day by day the storage medium is becoming smaller in size but at the same time its data holding capacity is increasing. The capability of the IT for data capture, speedy processing and storage and communication to any location helps to build the knowledge database. The knowledge database can be used for decision making by all. If any business process is analyzed it has two parts-one physical processes such as movement and handling of paper and goods, and other related to the processing of the data, information and decision-making. The first part of the process identifies searches, locates, picks up and then moves the paper or goods to the next stage for further processing. The IT provides work flow automation software, Bar Coding Technology, and intelligent material handling systems using microprocessor based technology to handle the physical side of the business process. The processes on the shop floor and warehouses can use the IT effectively to expedite all the steps of movement, handling, shifting, picking, locating, relocating and distribution of the goods. Intelligent material handling systems are available which use data for locating picking, assembling and packing.
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The second major component in the business process is data analysis and decision making to trigger a suitable action. Once the action is complete in the process, the necessary document would be generated and records at various locations be updated for further reference. The Information Technology provides different capabilities to deal with these requirements of the business process. The physical processes and the data handling processes go hand in hand. They are complementary and supportive to each other. Since, each business process is to be redesigned for a dramatic improvement, its key areas of attack are time and resource used by the processes. Our goal in re-engineering is to save the process time considerably and use minimum direct and indirect resources. The Information Technology, being efficient and effective in meeting the goals of re-engineering, its relevance to business process re-engineering is very apt. It is a process improvement enabler in Re-engineering the business process. The relevance of the Information Technology is appropriate due to its merit as the catalyst and the process partner for improvement. The Information Technology, in fact, takes over all human functions related to data, processing, and decision making. A business process, is found riddled with a number of steps where the Information Technology can playa role of an enabler to improve the process parameters. The speed and response of the basic steps such as searching, access, computing, analysing, transferring and communicating, printing, plotting, etc. are improved by IT. Beyond this, the Information Technology capabilities provide very mature and intelligent support in manufacturing, material handling, warehousing and reducing the process cycle-time. IT is an intelligent partner in the re-engineering project with its range of technologies.
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The use of Information Technology enables the re-engineering of the value stream process to be an expeditious process. The information technology is an enabler, the information systems are tools, and the decision support systems are drivers for the process performance. Are-engineered value stream process will generate the transactions to effect the business result. The management information system will capture the data on the various milestones in the process and create the MIS report for management at all levels. 8.3.3 MIS and BPR Any exercise towards building design of the management information system will be preceded by an exercise of business process re-engineering. Building the MIS is a long-term project. It is, therefore, essential to have a relook at the organisation where the mission and goals of the organisation are likely to be replaced. The business itself would undergo a qualitative change in terms of the business focus, work culture and style and the value system. This would change the platform of business calling for a different MIS. The MIS will concentrate more on the performance parameter evaluation which is different in the re-engineered organisation. The data capture, processing, analysis and reporting would be process central and performance efficiency would be evaluated in relation to the value generated by the processes. The decision support systems will be integrated in the business process itself, where triggers are used to move the process. The triggers could be business rules and stored procedures, enabling the process to become automotive in its execution. The MIS in the re-engineered organisation would be more of a performance monitoring tool to start with and then a control for the performance. The traditional MIS is function-centered like
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finance, production, material, etc. The Management Information System in a re-engineered organisation would be process centred, evaluating customer satisfaction, expectations and perceptions. The role of Management Information System will be raised to a level where the following activities would be viewed for the management action: Control of process cycle time Work group efficiency Customer satisfaction index Process efficiency and effectiveness Effectiveness of the Management in enterprise management and not in enterprise resource The strength of the organisation in terms of knowledge, learning and strategic effectiveness The traditional role of the MIS as a decision supporter will continue, however. 8.3.4 Self Assessment Questions (Section 8.3) 1. What are the possible reasons for the delay in the business process? 2. Explain the link between MIS and BPR.

8.4 Summary
The approach to re-engineering aims at customer focus. It requires one to take a different view of the business-the view based on the process and not on the tasks or functions. The re-engineering exercise will measure the process efficiency and effectiveness of the existing processes and bring in a dramatic improvement in all the performance criteria of business such as the cost, the quality, the service and the speed of delivery. The modem information technology provides very powerful communication facilities with
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no limitation of distance. The hardware and the software heterogeneity do not pose any problems.

8.5 Terminal Questions

1. Explain the relevance of IT in BPR. 2. Find out a relevant case in which BPR has been adapted and relate the concepts that you find in this chapter with that case.

8.6 Multiple Choice Questions

1. ______ defines re-engineering as 'the fundamental rethinking and radical redesign of Business process to achieve dramatic improvements in the critical contemporary measures of performance such as cost, quality, service and speed'. A. Michael Hammer B. Michael Schumacher C. Micheal Jackson D. Michael Clarke 2. Business re-engineering requires a major change in the _______ . A. Machine B. mindset C. material D. infrastructure 3. _______ is traditional measure. A. cost B. quality C. productivity D. All of the above

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8.7 Answers to SAQs, TQs and MCQ

Self Assessment Questions Section 8.2.5 1. This has been mentioned in section 8.2.1. 2. This has been mentioned in section 8.2.2 3. This has been mentioned in section 8.2.4 Section 8.3.4 1. This has been mentioned in section 8.3.1 2. This has been mentioned in section 8.3.3 Terminal Questions 1. This has been mentioned in section 8.3.2 2. Read the entire chapter and relate to the situation. Multiple Choice Questions 1. A 2. B 3. D

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