BPR: Business Process Re-engineering
Business Process
Davenport&Short (1990) define business process as “a set of logically related tasks performed to achieve a defined business outcome”.

On the other hand, Hammer&Champy (1993) define business process as “a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer”.

Davenport&Short (1990) have categorized business processes according to three dimensions:

  1. Organizational entities or subunits involved in the process (Interorganizational, Interfunctional, and Interpersonal Processes)
  2. The type of objects manipulated (Physical and Informational Processes)
  3. The type of activities taking place (Operational and Managerial Processes)
Business Process Reengineering
Hammer&Champy (1993) have promoted the definition of BPR to “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”.

Although, there are still many other authors with variations on these terms, all referring to process changes large and small, the BPR definition of Hammer&Champy (1993) is widely accepted today. This definition comprises four keywords: fundamental, radical, dramatic and processes.

Keyword 1: Fundamental
Understanding the fundamental operations of business is the first step prior to reengineering. Business people must ask the most basic questions about their companies and how they operate: “Why do we do what we do?” and “Why do we do it the way we do?” Asking these basic questions lead people to understand the fundamental operations and to think why the old rules and assumptions exist. Often, these rules and assumptions are inappropriate and obsolete.
Keyword 2: Radical
Radical redesign means disregarding all existing structures and procedures, and inventing completely new ways of accomplishing work. Reengineering is about business reinvention, begins with no assumptions and takes nothing for granted.
Keyword 3: Dramatic
Reengineering is not about making marginal improvements or modification but about achieving dramatic improvements in performance. There are three kinds of companies that undertake reengineering in general. First are companies that find themselves in deep trouble. They have no choice. Second are companies that foresee themselves in trouble because of changing economic environment. Third are companies that are in the peak conditions. They see reengineering as a chance to further their lead over their competitors.
Keyword 4: Processes
The final keyword “Process”, though the most important in the definition, is the one that gives most corporate managers the greatest difficulty. Most business people are not process-oriented; they are focused on tasks, on jobs, on people, on structures, but not on processes.
BPR Methodology

1) Develop Business Vision and Process Objectives: BPR is driven by a business vision which implies specific business objectives such as Cost Reduction, Time Reduction, Output Quality Improvement, Quality of Worklife (QWL)/Learning/Empowerment.

2) Identify Processes to be Redesigned: Most firms use the High-Impact approach which focuses on the most important processes or those that conflict most with the business vision. Lesser number of firms use the Exhaustive approach that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.

3) Understand and Measure the Existing Processes: Understanding and measuring the existing processes before redesigning them is especially important, because problems must be understood so that they are not repeated. On the other hand, accurate measurement can serve as a baseline for future improvements.

4) Identify IT Levers: In the broadest sense, all of IT’s capabilities involve improving coordination and information access across organizational units, thereby allowing for more effective management of task interdependence. An awareness of IT capabilities can -and should- influence process design. Therefore, the role of IT in a process should be considered in the early stages of its redesign.

5) Design and Build a Prototype of the New Process: The actual design should not be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations expected and managed. Key factors and tactics to consider in process design and prototype generation include using IT as a design tool, understanding generic design criteria, and creating organizational prototypes.

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