Page 94 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 7: Basics of Business Process Reengineering

Star Vault, Inc., a mid-sized entertainment organization illustrates the danger of
being slashed of its future growth due to the use of BPR.

Star Vault gained short-term profitability after sacrificing their internal production
ability to create new products. Senior management discovered that the library in the
organization started becoming overexposed and competition for the most attractive
product acquisitions became intense. Hence, they were forced to reevaluate their
strategic direction. Instead of enhancing the processes, the company started
eliminating the non-value added expenditures and evaluating the organization’s
elements that were relevant to the strategy. Due to this, the organization now has
the opportunity to increase and sustain its market share.

To achieve lasting benefits, organizations must be willing to examine how well
strategy and reengineering complement each other. For this, companies must
quantify strategy, accept ownership of strategy within the organization by assessing
the organization’s current processes and capabilities realistically, and associating
strategy to the budgeting process.

7.1.1 Concepts of Reengineering
In a world that is driven increasingly by the three Cs namely, customer, competition, and change,
organizations are constantly searching for innovative solutions for their business issues. Business
Process Reengineering (BPR) has emerged as a solution for resolving business issues.
Reengineering is the radical design and fundamental rethinking of business processes that help attain
dramatic enhancements in critical measures of performance like cost, service, quality, and speed. Hence,
BPR is the redesign and analysis of workflow done within and among enterprises.
BPR does not believe in small enhancements, instead they aim at an overall reinvention. Clearly, BPR is
not for organizations that need short-term enhancement. It is for them that require a long-term growth.
According to Champy and Hammer, the most essential keyword is the term ‘process’. BPR emphasizes
on processes and not on people, tasks, or jobs.
Reengineering focuses on processes as the effectiveness of organizations depend on their processes. A
Business process consists of many steps that are designed to produce a service or a product. It
comprises all the activities that help deliver specific results. Currently, processes are unnamed and
invisible as people think about individual departments often, rather than the processes with which they
are involved. Thereby, instead of thinking in terms of departments like manufacturing and marketing,
organizations must identify the processes to express their start and end states. The names assigned to
the processes should signify all the tasks that are done between the start and end of the process.

Order fulfillment can be termed as Order to payment process.

Just as organizations have organization charts, they must also have process maps that depict how job
cycle flows within the company. Process mapping offers proven methodology and tools to determine
the present business processes and may be used to offer a roadmap for reengineering the service and
product business enterprise functions. Organizations cannot reengineer all their business processes
simultaneously. Often, they make choices based on the following three criteria:

1. Dysfunction: Identify the processes that are functioning badly.
2. Importance: Identify the processes that are most influential and critical.
3. Feasibility: Identify the processes that are likely to be reengineered successfully.

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