By the end of the chapter the student should be able to:
(i) Define the term business process re-engineering
(ii) Outline the components of business process re-engineering
(iii) Highlight the advantages and disadvantages of functional structures
(iv) Explain the process of business process re-engineering
Business process re-engineering (BPR) 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.
Components of business process re-engineering definition
– Fundamental rethinking – reengineering usually refers to the changing of signiicant business processes
– Radical redesign – involves a complete rethink about the way the business operates
– Dramatic improvements – tens or hundreds of percent improvement
– Critical contemporary measures of performance – process measures based on competitive factors of cost, quality, service and speed.
BPR stresses the use of information technology as a catalyst for these major changes.
Examples given include decision support systems, teleconferencing and shared databases.
BPR organises work around customer processes rather than functional hierarchies
Advantages of functional structures:
– Creates a pool of expertise which can service a number of areas
– Helps develop careers in a particular field
Disadvantages of functional structures:
– Focus of work can be on functional boss rather than end customer
– No one takes overall responsibility for overall process
– Tasks may be undertaken for internal functional reasons rather than overall business strategy
Implementing Business Process Redesign
The task of designing processes should be undertaken in a structured manner and the steps involved can be described as:
1. Identifying and documenting the process activities
2. Identifying processes for improvement
3. Evaluating process design alternatives
1. Identifying and documenting the process activities
The identification of activities in a current process design is a data collection exercise using methods such as examination of current documentation, interviews, and observation. In order to provide a framework for the design and improvement of service processes the techniques of process mapping and service blueprinting can be utilised.
2. Identifying processes for improvement
The identification of the relevant business processes for improvement can be undertaken using a scoring system in which prioritisation is governed by importance to customers and performance against competitors. Other measurement systems can be used such as a process marking guide covering the amount of impact and extent of innovation required of a process to meet performance across a number of critical SuccessFactors.
3. Evaluating Process Design Alternatives
There are many ways in which a process can be designed to meet particular objectives and so it is necessary to generate a range of innovative solutions for evaluation. Three approaches which can be used to generate new ideas are:
– Generating new designsthrough brainstorming
This approach offers the greatest scope for radical improvements to the process design but represents a risk in the implementation of a totally new approach.
– Modifying Existing Designs
This approach is less risky than a blue skies approach but may mean the opportunity for
a radical improvement in process design is missed
– Using an established „benchmark‟ design
This approach appliesthe idea of identifying the best-in-class performer for the particular processin question and adopting that design.
Review questions
1. Define the term business process re-engineering
2. Highlight the components of BPR
3. Explain the process of BPR
4. Identify two advantages of functional structures
5. Outline three approaches which can be used to generate ideas for BPR
Hammer, M and Champy, J. (1993) Re-engineering the Corporation: A Manifesto for Business
Revolution, Harper Business, New York.
Hayes, R.H. and Wheelwright, S.C. (1984) Restoring our Competitive Edge, John Wiley & Sons Ltd.
Hill, T 2005, Operations Management, 2 nd edn, Palgrave Macmillan, Basingstoke.
Johnson, G.; Scholes, K. and Whittington, R. (2008) Exploring Corporate Strategy: Text and
Cases, 8 th edn, FT Prentice Hall.

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