Chapter 2.2: Business Processes{0}

 
 

 

An Introduction to Business Process Reengineering

By Angela Salemme

                In order to keep up with today’s fast changing business and technology environments, organizations cannot afford to develop and streamline their processes at a slow, incremental pace.  Firms must reinvent their processes to see remarkable enhancement to compete in today’s marketplace.  This method of redesign is known as BUSINESS PROCESS REENGINEERING, or BPR. 

 What does REENGINEERING consist of?

                Muthu, Whitman, and Cheraghi define reengineering as “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” (1999).  In order to completely reengineer a business process, organizations must go “back to the basics and reexamine their very roots” (Muthu, 1999).  Reengineering is not always successful, in fact, 50 to 70 percent of organizations fail in their efforts to revamp their processes (Muthu, 1999).  Muthu, Whitman, and Cheraghi provide a methodology that organizations should follow to help improve their success in their overhaul efforts.  This methodology consists of five stages:  Prepare for BPR, Map and Analyze As-Is Process, Design To-Be Processes, Implement Reengineered Processes, and Improve Continuously (1999).  If there is a major need for the process to be revamped, then an organization should begin with the first method of the reengineering process that Muthu et al. present as a means for success, preparation:

Prepare for Business Process Reengineering

  1. Build a Cross Functional Team,
  2. Identity a Customer Driven Objective, and
  3. Develop Strategic Purpose.

If an organization makes it their “first priority to understand the expectations of [their] customers and where [their] existing process falls short of meeting those requirements…the mission or vision statement is formulated” (Muthu, 1999). 

Map and Analyze As-Is Process – form “a detailed flow-chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence” (Baltzan, 2009).

Business Process Map

  1. Create Activity Models,
  2. Create Process Models,
  3. Simulate & Perform Activity Based Costing, and
  4. Identify Disconnects & Value Adding Processes (Muthu, 1999).

 

Design To-Be Processes – “show the results of applying change improvement opportunities to the current ‘As-Is’ process model” (Baltzan, 2009)

  1. Benchmark Processes,
  2. Design To-be processes,
  3. Validate To-be Processes, and
  4. Perform Trade-off Analysis (Muthu, 1999).

 Implement Reengineered Processes

  1. Evolve Implementation Plan,
  2. Prototype & Simulate Transition Plans,
  3. Initiate Training Programs, and
  4. Implement Transition Plan (Muthu, 1999).

Improve Continuously

  1. Initiate On-Going Measurement,
  2. Review Performance Against Target, and
  3. Improve Process Continuously (Muthu, 1999).

 

References

Baltzan, P. &. (2009). Business Driven Information Systems. New York: McGraw-Hill/Irwin.

Knowledge Assets Development, Inc. (n.d.). Process Map. Retrieved September 5, 2010, from Knowldege Assets: http://knowledgeassets.com/ProcessMap

Muthu, S. e. (1999). Business Process Reengineering: A consolidated Methodology. International Conference on Industrial Engineering Theory, Applications and Practice. San Antonio: Deptartment of Industrial Engineering, Wichita State University.

By angelamsalemme Category: Strategic Decision Making