Page 68 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes 8. Skepticism: Some people view BPR as the same old traditional systems development with
a fancy new name and a more attractive wrapper. Others doubt it can be done. Skeptics
must either be convinced of the merits of BPR or kept from negatively influencing others if
BPR is to succeed.
9. Retraining: In many re-engineering projects the way work is done changes dramatically.
That means that workers have to be retrained, a time-consuming and expensive process.

Task Suggest how people play important role in business process re-engineering
concept.

3.10 implications of Business process re-engineering

Undoubtedly, Michael Hammer has garnered most of the BPR press because of the radical rhetoric
with which he communicates. However, the ideas expressed by Hammer (and later Hammer and
Champy) are similar to the new business process redesign concepts of Davenport and Short.
They agree that the processes should be transformed holistically rather than by fixing bottlenecks
in small increments. Furthermore, they agree on the essential role IT should play in business
process transformation. Most importantly, their ideas point to a formulation of the process
enterprise that is different from the functional hierarchical organization with which corporations
had been aligned. In their writings, the founders of BPR have repeatedly demonstrated the
poor coordination of functional organizations and the superiority of process organizations in
coordination and in achieving performance gains. In its most radical form, the process enterprise
is one that eliminates functional structure in favor of an exclusive process-based structure.
The more realistic approach for becoming a process enterprise is to have a matrix structure of
process-hierarchy and functional-hierarchy. Table 3.1 illustrates the differences between process
organization versus functional organization.
As illustrated above, process enterprise holds the promise of being more responsive to market
requirements, and it is suited for companies that offer differentiated products/services rather
than competing on cost alone. However, organizational realignment by itself does not result in
improvements. Organizational realignment has to be accompanied by change in management
practices and mindsets. A 1996 Harvard Business Review article by Ann Majchrzak and Qianwei
Wang of University of Southern California presents data supporting this viewpoint.

table 3.1: functional versus process organization

functional organization process organization
Work Unit Department Team
Key Figure Functional Executive Process Owner
Benefits Functional excellence Responsive to market requirements
Easier work balancing because Improved communication and collaboration
workers have similar skills between different functional tasks
Clear management direction on how Performance measurements aligned with
work should be performed process goals
Weaknesses Barrier to communication between Duplication of functional expertise
different functions Inconsistency of functional performance
Poor handover between functions that between processed
affects customer service. Increased operational complexity
Lack of end-to-end focus to optimize
organizational performance
Strategic Value Support cost leadership strategy Supports differentiation strategy

62 LoveLy professionaL university