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Unit 2: ERP and Related Technology

information technologies and the organization that supports these processes. Understanding notes
that process transformation is ultimately about doing work differently, is the key to successful
transformation. According to Hammer (1990), “Re-engineering is rethinking work”. Frequently
there is confusion about what re-engineering is and is not, and how it differs from process
improvement or ‘quick hits’.

2.3 How re-engineering is different from process improvements?

Typically, process improvements fall into three categories: quick hits, incremental improvement
and re-engineering.
1. Quick Hits: These are typically low risk, easily achievable efforts that provide immediate
payback opportunities (typically within a few months).

2. Incremental Improvement: This focuses on closing small performance gaps, delivers small
degrees of change that achieve small but meaningful business results.
Figure 2.1 illustrates the basic steps in Process Improvement.

figure 2.1: continuous process improvement model
Document AS – Establish Follow Measure Identify and
IS process measures process performance implement
improvements

This process begins by documenting what organizations do today, establish some way
to measure the process based on what their customers want, follow the process, measure
the results, and then identify improvement opportunities based on the data collected.
Organizations then implement process improvements, and measure the performance
of the new process. This loop repeats over and over again, and is called continuous
process improvement. It is also called business process improvement, functional process
improvement, etc. This method for improving business processes is effective to obtain
gradual, incremental improvement. However, over the last few years several factors have
accelerated the need to improve business processes. The most obvious is technology.
Technologies (like the Internet) are rapidly bringing new capabilities to businesses, thereby
raising the competitive bar and the need to improve business processes dramatically.
As a result, companies have sought out methods for faster business process improvement.
Moreover, organizations want breakthrough performance changes, not just incremental
changes, and they want it now. Because the rate of change has increased for everyone, few
businesses can afford a slow change process. One approach for rapid change and dramatic
improvement is business process re-engineering (BPR).
3. Re-engineering: This demonstrates breakthrough thinking and aims at dramatic business
results. Unlike quick hits and incremental improvement, re-engineering is a form of
organizational change characterized by dramatic process transformation.
BPR relies on a different school of thought than continuous process improvement. In the extreme,
re-engineering assumes that the current process is irrelevant, it does not work, it is broken,
forget it. Start over. Such a clear slate perspective enables the designers of business processes to
disassociate themselves from today’s process, and focus on a new process. It is like projecting
the organization into the future and asking themselves: what should the process look like? What
do their customers want it to look like? What to other employees want it to look like? How do
best-in-class organizations do it? What might they be able to do with ERP?
Such an approach is shown in Figure 2.2. It begins with mobilizing for action and defining the
scope and objectives of the re-engineering project and then planning for it, then documenting

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