Radical Change: Business Process Re-Engineering John Davis

What is it? Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. i.e. A rejection of incrementalism. Proposed by Hammond 1988

Why do it? New focus on customer needs Unleash creative potential of the organisation Recognise the increasing competitive nature of business Open up new markets Downward pressure on costs

What makes it special? Concentration on horizontal movements and processes across the organisation Identification on non-added value activities Radical nature of approach Concentration on outputs rather than inputs Redefines the role of the manager

The Spectrum of BPR Local & Limited Threat to Survival Risk Paradigm Business Re-engineering Paradigm Shift Sustainable Step Changes Ongoing Renewal Transformation Mindset Change Gains Process Re-engineering Process Improvement None Incremental Local Scope Business Wide

Process Improvement Adopted by most firms but is it BPR? Function oriented Usually aimed at reducing delays The process itself is not challenged Often: little critical appraisal Very little impact on the business as a whole

Process Re-Engineering Involves fundamental rethinking Usually involves radical streamlining Often starts with the question “should we be doing it all?” Has an effect on the “bottom line” However, if only 1 or 2 processes are redesigned, much of the business is untouched

Business Re-Engineering Involves step changes across all processes Usually greater emphasis on design and appraisal Involve significant to-level commitment Needs active Involvement of management Success seen on all processes and the performance as a whole

Transformation Where next after BPR? Is there a need for continuous radical change Often the questions are:- Why do they exist? What are they trying to achieve?

Tests for transformation might include: The company has step change improvements for all processes There is a perception that the business is dramatically better than 5 years ago A belief amongst customers & employees that the organisation is easier and better to work with There is an organisation wide clarity of purpose

Ongoing Renewal Those who go though BPR recognise that the process once started never stops New mind-sets have become part of the organisation

BPR is not compulsory Change may be managed in other ways Creative thinking Benchmarking Culture change innovation What makes BPR relevant is the role of IT

Does it work? The evidence is scanty Can an organisation cope with perpetual change? Can a firm reduced in size through BPR compete in the long run What about those cultures which do not easily accept criticism of authority?

Dangers The word re-engineering suggests a view of the organisation as a machine. Is this correct? Does BPR mean continuous short term thinking

Wrap-Up Is it all a fashion? Is it the only way to get dramatic improvements? Do employees really see themselves as empowered? Case studies of successful BPR suggest that these companies had a culture of good communications anyhow and so BPR was not so difficult. Is this always true?