What is Business Process Reengineering.

Explain it with Example An Overview:

Introduction Business Process Reengineering (BPR) Objectives of BPR An Example of BPR application Conclusion

Introduction:
BPR is known by many names, such as core process redesign, new industrial engineering or working smarter. All of them imply the same concept which focuses on integrating both business process redesign and deploying IT to support the reengineering work. In this section we attempt to explore two questions: where does BPR come from and what is involved in BPR (i.e. its principles and assumptions).

Definition Of Business Process Reengineering:

By Hammer and Champy (1993) Reengineering is 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. By Davenport (1993), describes business process redesign as: the analysis and design of workflows and processes within and between organizations. Business activities should be viewed as more than a collection of individual or even functional tasks; they should be broken down into processes that can be designed for maximum effectiveness, in both manufacturing and service environment.

Explanation:
BPR seeks to break from current processes and to devise new ways of organizing tasks, organizing people and making use of IT systems so that the resulting processes will better support the goals of the organization. This activity is done by identifying the critical business processes, analyzing these processes and redesigning them for efficient improvement and benefit. Vidgen et al. (1994) define the central tenets of BPR as: Radical change and assumption challenge; Process and goal orientation

Objectives of BPR:
When applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives:

Customer focus:
Customer service oriented processes aiming to eliminate customer complaints.

Speed:
Dramatic compression of the time it takes to complete a task for key business processes. For instance, if process before BPR had an average cycle time 5 hours, after BPR the average cycle time should be cut down to half an hour.

Flexibility:
Adaptive processes and structures to changing conditions and competition. Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market.

Quality:
Obsession with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person, who servicing the customer.

Innovation:
Leadership through imaginative change providing to organization competitive advantage.

An Example of BPR application:

A typical problem with processes in vertical organizational structure is that customers must speak with various staff members for different inquiries. For example, if a bank customer enters into the bank determined to apply for a loan, apply for an ATM card and open a savings account, most probably must visit three different desks in order to be serviced, as illustrated in following Diagram:

LOANS

ACCOUNTS

ATM CARDS

When BPR is applied to an organization the customer communicates with only one person, called "case manager", for all three inquiries, shown in following:

LOANS/ ACCOUNTS/ ATM CARDS

Most importantly, while the loan application team was processing the loan application, the case manager "triggered" the account team to open a savings account and the ATM team to supply the customer with an ATM card. The customer leaves the bank having a response for his loan application, a new savings account and an ATM card, And all these without having to move around the desks for signatures and documents. All the customer's requests were satisfied at the same time in parallel motion.

Conclusion:
It is evident that no BPR will be successful without the support and active participation of the people. Even after all persons agree to go with BPR, it is still a hard task for everyone to carry on. Before commencing BPR, we have to examine the existing business processes deeply in order to redefine and redesign their nature. To gain a wider picture of existing processes we need to consider the following questions: How does the process under development fit into the whole business picture? Who are the participants in the process? What are the requirements of the process? What is the final objective of this process?