Page 149 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Organization Change and Development

Notes Reengineering

It is 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. Reengineering focuses on visualizing and streamlining any or all business processes
in the organization. It seeks to make such processes more efficient by combining, eliminating,
or restructuring activities without regard to present hierarchical or control procedures.
Reengineering is a top-down process; assumes neither an upward flow of involvement nor that
consensus decision making
Business Process Reengineering (BPR) can be defined as:
... a radical scrutiny, questioning, redefinition and redesign of business processes with the aim of eliminating
all activities not central to the process goals … and automating all activities not requiring human judgmental
input, or facilitating that judgment at reduced cost (Thomas 1994, p.28).
BPR was championed by Michael Hammer and James Champy (1994) in the book

'Reengineering the Corporation' in which they advocated that old systems be discarded and
replaced with new, more innovative and effective processes. BPR demands lateral thinking that
extends beyond the current boundaries in order to achieve a more effective organisation.
BPR has been heavily criticised in the literature. One criticism is that BPR is focused on the
implementation of new technology, rather than the improvement of business processes.
Information technology companies are selling 'solutions' to business problems and are promoting
the existence of problems merely to enhance sales of their own products and services (Thomas,
1994). BPR has also been criticised as being associated with downsizing and cost-cutting, with
little regard for quality or long-term business objectives (Mumford & Hendricks 1996). However,
Hammer has defended BPR, stating that it was not intended as a way to simply slash labour
costs, but to streamline work processes, remove bureaucratic procedures and increase efficiency
(cited in Mumford & Hendricks 1996).
BPR starts with a vision or idea. However, ideas only come from three sources - they can be
copied from other companies (benchmarking), bought (from an IT company or consultant), or
they can be original ideas (Thomas 1994). Benchmarking does not allow competitive advantage
and buying the idea is expensive and often results in the purchase of a 'solution' which is not
relevant to the business to which it is sold. While original ideas seem to be the only way to
develop unique and relevant solutions, they are often developed within existing and constricting
frameworks to maximise the chances of them being accepted. Indeed, original ideas are criticised
by Thomas who believes that the acceptance of an idea is 'inversely related to its radicalness,
especially when associated, as it is so often, with significant downsizing' (1994, p. 30).
Perhaps it is the lack of constricting frameworks that has prompted many BPR initiatives to be
conducted in greenfield sites. Indeed, large organisations have been known to set up new
companies with new staff, new policies, and new methods to the parent company. This 'starting
again' avoids the issue of organisational change and transformation which is complicated in
BPR due to the frame-braking nature of the changes (Thomas 1994). However, Patching (1995)
argues that is possible to gain commitment and motivation during reengineering through the
use of the vision.

Although the radicalness of BPR can create many challenges, it also appears to be able to offer
many advantages when it is implemented successfully. Furthermore, research shows that around
eighty percent of organisations that implement BPR are satisfied with the results (O'Neill &
Sohal 1997). An organisation that has embraced BPR and developed an original idea is likely to
be the leader in their industry rather than the follower. This can lead to a competitive advantage
and can positively and drastically affect organisational performance.

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