MB 10-01 : BUSINESS PROCESS RE-ENGINEERING 1.1

1A. Define Business Process reengineering and identify the various important elements in the definition of business process reengineering.

Ans. "Re-engineering" 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." This definition contains four key words.

FUNDAMENTAL
The first key word is "fundamental". In doing re-engineering, business people must ask the most basic questions about their companies and how they operate. Why do we do what we do? And why do we do it the way we do? Asking theses fundamental questions forces people to look at the tacit rule and assumptions the underline the way they conduct their business. Often,these rules turn out to be obsolete, erroneous or inappropriate.
Re-engineering begins with no assumptions and no givens. Infact, companies that undertake re-engineering must guard against the assumptions that most processes already have embedded in them. Re-engineering first determines what a company must do, then how to do it. Re-engineering takes nothing for granted. It ignores what is and concentrates on what it should be.
RADICAL
The second keyword in the definition is radical, which is derived from the Latin word "radix”, meaning root. Radical redesign means getting to the roo of things, not making superficial changes or fiddling with what is already in place, but throwing away the old. In re-engineering, radical redesign means disregarding all existing structures and procedures and inventing completely new ways of accomplishing work. Re-engineering is about business reinvention-not businesss improvement, business enhancement or business modification.
DRAMATIC
The third key word is dramatic. Re-engineering is n't about making marginal or incremental improvements but about achieving quantum leaps in performance. Re-engineering should be brought in only when a need exists for heavy blasting. Marginal improvements requires fine tuning, dramatic improvement demands blowing up the old and replacing it with something new.
Three kinds of companies that undertake re-engineering have been identified. First are companies that find themselves in deep trouble. They have no choice. If a company's costs are an order of magnitude higher than competition's or than its business model will allow,if its product rate is twice,three times or five times great as the competition's, if , in other words, it needs order-of-magnitude improvement, that company clearly needs business re-engineering.
Second are companies that are not yet in trouble but whose management has the foresight to see trouble coming. These companies have the vision to begin re-engineering in advance of running into adversity.
The third types of companies undertaking re-engineering are those that are at peak condition. They have no discernible difficulties, either now or on the horizon, but their managemens are ambitious and aggressive. Companies in this category see re-engineering as an opportunity to further their lead over their competitors.
PROCESSES
The fourth key word is processes. Although this word is the most important in the definition, it is also the one that gives most corporate managers the greatest difficulty. Most business people are not "process-oriented:, they are focused on tasks, on jobs, on people, on structures but not on processes.
Definition of business process is "a collection of activities that takes one or more kinds of input and creates an out put that is of value to the customer". Under the influence of Adam Smith's notion of breaking work into its simplest tasks and assiging each of these to a specialist, modern companies and their managers focus on the individual tasks in this process-receiving the order form, picking the goods from yhe warehouse, ans so fourth-and tend to lose sight of the larger objective, which is to get the goods into the hands of the customer who ordered them.

1B. Explain what re-engineering is and what it is not.
First, despite the prominent role played by information technology in business re-engineering, it is not the same as automation. Automating the existing processes with information technology provides more efficient wayas of doing the wrong kinds of things. Nor is re-engineering involves only software re-engineering, which means rebuilding obsolete information system with more modern technology. Software re-engineering often produces nothing more than sophisticated computerized system that auto mate obsolete processes.
Re-engineering is not restructuring or downsizing. Downsizing and restructuting mean doing less with less whereas re-engineering means doing more with less. Re-engineering is also not same as reorganizing,delayering,or flattening an organization,although re-engineering may, in fact produce a flatter organization. The problems facing companies do not result from their organizational structure but their process structure. The way to eliminate bureaucracy and flatten the organization is by re-engineering the processs so that they are no longer fragmented.
Re-engineering is not the same as quality improvement, total quality movement. But they share a number of common themes. They both recognize the importance of process, and they both start with the needs of the process customer and work backwards from there. However, the two programs also differ fundamentally. Quality programs work with in the frame work of the company's existing processes and seek to enhance them by means of continuous improvement. Whereas re-engineering, seeks breakthroughs, not by enhancing the existing processes, but by discarding them and replacing them with entirely new ones. Business re-engineering is synonymous with innovation because it is more than just automating or computerizing existing operations or processes. Also re-engineering involves a different approach to change management from that needed by quality programs. It can also be said that business process re-engineering is a powerful tool to accomplish total quality.
The conventional way of describing the organization will be replaced by a new description, using processes running across the departments and functions. The process thinking and multiple processes integration make the organization seamless. The flow of information will be free from barriers, Re-engineering exercise will measure process efficiency and its effectiveness, and bring in a dramatic improvement in all the performance criteria of the business such as cost,quality,service and speed od delivery
Re-engineering is about beginning all over again. It is about rejecting the conventional wisdom and received assumptions of the past. Re-engineering is about inventing new approaches to process structure that bear little or no resemblance to the previous structures. Re-engineering is the search for new models of organizing work.