Reengineering was formally defined by Michael Hammer and James Champy in their landmark book Reengineering the corporation – a manifesto for business revolution as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality and speed. Business process reengineering entails fundamental rethinking of the way we do the work. There is a lot to our work which was designed as a basic necessity of a bygone era and is accepted as an unquestioned routine today. Our experiences are replete with such examples. Reengineering is based on challenging such in-built assumptions and re-design the work. Reengineering is not about simple process improvements, it is about process invention – a completely new way of working – resulting in order of magnitude impact on the outcome.
Typically companies find that processes that are modified or improved to handle exceptions or to deal with specific circumstances, remain unaltered with change in times, unless critically probed and questioned. The concentration of power built by the traditional structures, and ensuing politics prevent them from working efficiently. In order to de-bottleneck the process, management introduces unique incentives and rewards encouraging efficient task performance, which soon becomes the norm and gains permanency but in the long run leads to sub-optimization of the process and often changes the way the work gets measured in an organization. The effect – bloated bureaucracies, unchallenged assumptions and loss of customer orientation – shows up in dwindling business performance in the face of new competition that has changed the rules of the game.
Reengineering – the hype
Business process reengineering was an inevitable response to the threatening rise of overseas competition through the decades of 70s and 80s in corporate America. Experts found that a huge difference lay in the way work is conducted in many of the successful companies that were threatening American dominance – the difference was process centric approach by those companies. The proponents of BPR soon came up with ideas of how process centric approach can make a difference in the way work is conducted and use of IT solutions to process management was seen as a means of achieving the order of magnitude improvements in process performance and results. The hype for BPR was created around the publicity that successful companies got. The prospect of dramatic improvements and radical redesign of work inspired many a management to have a go at BPR.
Business process reengineering was an inevitable response to the threatening rise of overseas competition through the decades of 70s and 80s in corporate America. Experts found that a huge difference lay in the way work is conducted in many of the successful companies that were threatening American dominance – the difference was process centric approach by those companies. The proponents of BPR soon came up with ideas of how process centric approach can make a difference in the way work is conducted and use of IT solutions to process management was seen as a means of achieving the order of magnitude improvements in process performance and results. The hype for BPR was created around the publicity that successful companies got. The prospect of dramatic improvements and radical redesign of work inspired many a management to have a go at BPR.
The reality and myth
The thought of dramatic improvement in performance had driven many companies to the door steps of reengineering. In their single minded pursuance of dramatic improvements these companies lost focus of some of the most important elements of reengineering. They forgot to have a vision and strategies around which processes could be redesigned. They had no priorities for processes to be redesigned. They went for reengineering the processes with out any inkling of how the process stakeholders would be affected by such a drastic change. And most importantly the people who were to work on change and bear the consequences of change were often forgotten. All the technology and process expertise took these companies no where in the absence of involvement and commitment of people. In fact reengineering came to be associated more of a downsizing exercise than as a means of transforming the business performance. The result – 50 to 70 percent of reengineering efforts flopped and many of those succeeded had a long drawn painful experience.
The thought of dramatic improvement in performance had driven many companies to the door steps of reengineering. In their single minded pursuance of dramatic improvements these companies lost focus of some of the most important elements of reengineering. They forgot to have a vision and strategies around which processes could be redesigned. They had no priorities for processes to be redesigned. They went for reengineering the processes with out any inkling of how the process stakeholders would be affected by such a drastic change. And most importantly the people who were to work on change and bear the consequences of change were often forgotten. All the technology and process expertise took these companies no where in the absence of involvement and commitment of people. In fact reengineering came to be associated more of a downsizing exercise than as a means of transforming the business performance. The result – 50 to 70 percent of reengineering efforts flopped and many of those succeeded had a long drawn painful experience.
The concepts of business process reengineering are relevant even today in the sense that eliminating handoffs, rework and redundancy, with changing business environment and emerging competition and customer preferences. But as successful companies have proved reengineering the process should be aligned with the requirements to deliver mission and strategies of the company and it requires meticulous planning and execution with full confidence of the people. IT cannot drive the change; it can only enable the changed process to deliver the desired results.
Combining the hype, myth and reality of BPR, it can be said that business process reengineering definitely can help a company to get ahead of competition in a big way only when its demands are well understood and carried out with the full cooperation of people. It is softer aspects of business like leadership commitment, effectiveness of communication exercise to buy-in people and willingness of people to take up the challenge that are crucial for a successful BPR implementation rather than the factors that have traditionally received more attention like resources, IT infrastructure and expertise.
Present and future
Businesses accept that process orientation, continuous and discontinuous improvements are essential but at present there seems to be a air of caution. There is a distinct need to reengineer the business processes before applying IT solution like ERP to them, but are companies really doing BPR? ERP solution providers are offering software implementation of best practices which can be suitably used and reengineering done. Now, this is more of benchmarking than reengineering but risk of failure and long drawn times are addressed. Businesses have accepted this compromise formula and in doing so, they are missing out on the possibilities that BPR is capable of providing.
Businesses accept that process orientation, continuous and discontinuous improvements are essential but at present there seems to be a air of caution. There is a distinct need to reengineer the business processes before applying IT solution like ERP to them, but are companies really doing BPR? ERP solution providers are offering software implementation of best practices which can be suitably used and reengineering done. Now, this is more of benchmarking than reengineering but risk of failure and long drawn times are addressed. Businesses have accepted this compromise formula and in doing so, they are missing out on the possibilities that BPR is capable of providing.
As long as performance excellence is going to be the prime concern of the business and technology promises to change the way we do our work and excel at it, there will the fusion of two. Reengineering as a proactive move toward excellence seems less likely option – BPM is the mantra today.
Thanks for sharing it.
ReplyDeleteMisconception about ERP software