More than ever, today’s economic conditions clamour for periodical business process reengineering. Operating conditions put a great deal of pressure on small and large business organisations to find ways to return to, or improve their profitability levels. Such a scenario requires business executives to ask themselves:
- Are our business processes streamlined or are they beset by fragmentation?
- Are our business processes optimised to achieve maximum profitability and cut down on waste?
- Are customers satisfied?
- How can customer satisfaction and brand loyalty be improved?
- Are the current business processes efficient?
- So they lend themselves to efficiency-enhancing automation?
- Is the organisation adapting to the changing market conditions?
- Are the organisational structures fully geared to capitalise on the opportunities being made up for by changing market conditions?
One proposed management tool which focuses on finding new and better ways of getting this work done is through Business Process Reengineering.
The main aim of Business Process Reengineering is to radically rethink, structure or restructure, and optimise an organisation’s business process designs through the reduction of inefficiencies, the elimination of obsolete business processes and practices, and their streamlining.
Business Process Reengineering usually entails a detailed analysis of the current business processes. Such analysis covers organisational structures, processes, policies, employee behaviour, employee skills, management styles and the use of information technology and aims to identify shortfalls or opportunities for improvement to achieve significant advancements in overall performance. Apart from aiming to achieve a healthy bottom line, when done properly, the benefits from Business Process Reengineering include higher levels of customer service and satisfaction, increased brand loyalty, lower operational costs, higher response times, improved cycle times, greater accuracy in business processes, better productivity, improved quality and increased competitive advantage.
Re-engineering “encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human and organizational dimensions”.
– Definition by Davenport (1993).
When undertaking Business Process Reengineering, in order to deliver greater value to customers, organisations typically start from a hypothetical blank slate situation and rethink their existing processes. Once this exercise is concluded, the newly-designed processes are then compared to those that are currently in place with a view to eliminating any existing barriers and bottlenecks in the organisational structures, processes and policies. Functional departments are sometimes redesigned into cross-functional teams for greater synergy. However, one challenge organisations usually face is the change from a functional mind-set to a horizontal organisational structure. This requires switching from a functional silo mentality to a process-oriented structure whereby emphasis is on sharing knowledge and information, and with employees from different areas of expertise being brought closer together to work on projects in teams. If done well, the re-organisation of human resources into closer-knit groups increases accountability over the whole process, and is a cheaper and better way of performing an activity.
Technology is considered to be a strategic instrument for a firm to be able to compete effectively on the market. Information Technology (IT) therefore plays an unsurprisingly important role in re-engineering since data could be disseminated throughout the organisation faster, while providing cheaper solutions and improving the decision making process. In a changing process, IT can facilitate the execution of change through the sharing of databases, electronic data exchanges and shared computer resources.
Business Process Reengineering is also a means of optimising your business processes. This results in more efficient processes, streamlining your business and monitoring key performance objectives. This requires a more detailed examination of your processes which can be divided into three parts, namely:
- Core processes – these are usually the reason why the system was built in the first place. The core processes identify the primary value delivered to customers. These broadly include sales, manufacturing or services provision.
- Support processes – the resources that are required to make the core processes work. These include human resources, IT, suppliers, external relations, accounting, and the like.
- Management processes – these are required to direct, evaluate and intervene when necessary to ensure that the system is functioning properly and that existing opportunities are capitalised on.
Substantial gains from Business Process Reengineering are likely to be registered if processes are inefficient or outdated. Although Business Process Reengineering is usually a technique that organisations utilise in the event of serious operational deficiencies, Business Process Reengineering has also resulted in significant gains when such deficiencies were not identified to start with. In this sense, Business Process Reengineering can also be undertaken with good results to optimise processes (especially where these have been developed incrementally) rather than to overhaul them radically.
Business Process Reengineering has proved to be a useful tool since the early 1990’s. Many organisations from various industries from all over the world have moved closer to operational excellence as a result of well-executed re-engineering exercises.
Equinox provides comprehensive Business Process Reengineering solutions. In delivering Business Process Reengineering, we use our full-range of service areas expertise to ensure that we cover all the organisational aspects that need to be covered in Business Process Reengineering exercises in order for them to be truly useful to the client. Whether we are analysing processes, structures or policies, we leverage our wide range of expertise covering legal compliance, technology, management, internal auditing, psychometric job-fitting and organisational design to be able to deliver best-value solutions to our clients that result in tangible benefits on the ground.