Reeng inee r ing and i t s re l a t i onsh i p w i th f unc t i ona l a rea s o f bus iness .H i s to ry o f re eng i nee r ing ,Sugge s ted ree ng inee r ing f r a me work . De te rm i n i s t i c mach ines , comp lex dyna mic sys tem, i n te ra c t i ng f ee dba ck l oops a nd soc ia l cons t ruc t s pe r spe c t i ve s o f BPR.

Unit – I: Introduction to BPR

Introduction

Business process re-engineering is the analysis and design of workflows and processes within an organization.

Re-engineering is the radical redesign of business processes and organizational structure in order to achieve significant improvements in performance, such as productivity, cost reduction, cycle time, and quality.

Definition by Davenport (1990) “a business process is a set of logically related tasks performed to achieve a defined business outcome”.

Re-engineering is involved with many aspects of businesses like Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management.

Business process re-engineering is also known as business process redesign, business transformation, or business process change management.

Business process re-engineering (BPR) began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.

A key stimulus for re-engineering has been the continuing development and deployment of sophisticated information systems and networks.

Business Process Re-engineering (BPR) is basically the fundamental re-thinking and radical re-design, made to an organization's existing resources.

It is an approach for redesigning the way work is done to better support the organization's mission and reduce costs.

Reengineering starts with a high-level assessment of the organization's mission, strategic goals, and customer needs.

A five step approach to Business Process Reengineering

Davenport (1992) prescribes a five-step approach to the Business Process Reengineering model:

Develop the business vision and process objectives: The BPR method is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement.

Identify the business processes to be redesigned: most firms use the 'high-impact' approach which focuses on the most important processes or those that conflict most with the business vision. A lesser number of firms use the 'exhaustive approach' that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.

Understand and measure the existing processes: to avoid the repeating of old mistakes and to provide a baseline for future improvements. Compare: Scientific Management

Identify IT levers: awareness of IT capabilities can and should influence BPR. Design and build a prototype of the new process: the actual design should not

be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations. The metaphor of prototype aligns the Business Process Reengineering approach with quick delivery of results, and the involvement and satisfaction of customers.

Importance of Business Process Reengineering

The importance of Business Process Reengineering to any organization can not be stressed enough

the world is becoming more competitive. both internationally and domestically

there is over capacity in the world because many technological improvements have resulted in less staff being needed

technology will continue make jobs obsolete it is unclear if demand from emerging markets will fill up that

capacity

History

In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute of Technology (MIT), published an article in the Harvard Business Review, in which he claimed that the major challenge for managers is to reduce non-value adding work, rather than using technology for automating it.

Hammer's claim was simple: Most of the work being done does not add any value for customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their processes in order to maximize customer value, while minimizing the consumption of resources required for delivering their product or service.

A similar idea was advocated by Thomas H. Davenport and J. Short in 1990, During the following years, a fast growing number of publications, books as well as journal articles, were dedicated to BPR, and many consulting firms embarked on this trend and developed BPR methods.

Reengineering was adopted at an accelerating pace and by 1993, as many as 65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so.

This trend was fueled by the fast adoption of BPR by the consulting industry, but also by the study Made in America, conducted by MIT, that showed how companies in many US industries had lagged behind their foreign counterparts in terms of competitiveness, time-to-market and productivity.

Business Process Reengineering Framework

There are several basic tenets that serve the basis for Business Process Reengineering Framework

Material should only be handles once the employee with the least possible skills should perform the

activity reviews should be eliminated to the extent possible upgrading of systems and equipment are a possibility staff may have to be trained staff with different skills may be needed managers may have to give up reviewing stuff business processed should be documents and updated

Reengineering and its relationship with functional areas of business.

Marketing strategies outline the manner in which your marketing mix is used to attract and satisfy your target market, thus fulfilling your business's objectives, which is to derive net profit from your business activities.

At the heart of marketing strategies lies your product. The product drives a profitable business. Without an excellent product, business may not go very far, without a great marketing system. Thus, developing an effective marketing strategy starts with the product, using the 4-step Marketing Reengineering Process outlined below:-

Sensing: Marketing Audit

Planning: Marketing Physics

Implementing: Marketing System

Reflecting: Marketing Mathematics

Business Objectives

Strategy

Tactics

Measure

Sensing: Marketing Audit The cost of marketing lies in sending the message to the

target market. The clearer the target marketing, the lower the marketing costs.

Therefore, the first step "Sensing" is to perform information gathering about the target market. You will need to perform a few analysis:-

SWOT analysisStrengths, Weaknesses, Opportunities, Threats

PEST analysisPolitical, Economic, Social and Technological factors

Planning: Marketing Physics Marketing Physics defines what your product means to the customer. It

helps you to look inwards, evaluate your products and develop an effective marketing angle to position your products uniquely in the market.

There are three marketing laws in Marketing Physics. These marketing laws will enable you to angle your marketing strategy in a way that will enable your customers to understand and see the dramatic difference of your products and services.

From the information you have gathered and ideas you have developed from Marketing Physics, start weaving these ideas together in a coherent manner to create marketing plan. The plan should contain a sequence of steps for implementation.

Implementing: Marketing System With the marketing plan in your hand, you can tend start

implementation. You should create a Marketing Funnel, that converts your visiting suspects to qualified prospects to paying customers to loyal members to raving fans. The key thing to do during implementation is to test and measure the key performance indicators (KPIs) that you have defined in Step 1 "Sensing" under strategic objectives.

You need to put in place tracking mechanisms for all the different marketing channels that you have and then perform testing for different versions of your marketing messages.You must be able to apply Marketing Mathematics to measure the response of your marketing efforts, so that you can continually improve the effectiveness of your marketing campaign.

Reflecting: Marketing Mathematics Lastly, with the results coming in from Step 3 "Implementing",

you will then assess if the strategic objectives (such as specific key performance indicators) laid out in Step 1 "Sensing" are met.

Based on the numbers from Step 3, you will know which of your marketing efforts are winners and which are non-performers. You can then decide to cut the losers and put more resources into the winners, and repeat the cycle of "Sensing", "Planning", "Implementing" and "Reflecting".

Successful marketing strategies must contain ways to out-manoeuvre your competition. It is an on-going process that builds and leverages on your competitive advantages, and must be adaptable, sustainable and forward looking.

Financial Re-engineering Financial Re-engineering is the re-cementing or changing of

products, systems, people, brands and technology which has to be done with financial restructuring and financial re-quantification of every qualitative business variable.

Objectives of Financial Re-engineering Facilitation of the New Budget Framework. Improve the efficiency and accuracy of financial data capture. Reduce the number of cost centre’s in the General Ledger. Introduce structures to facilitate future introduction o project

costing. Identification, review and improvement of key process

controls.

Benefits of Financial Re-engineering Ease of Access Benefit. Ease of Analysis Benefit. Better Decision Making Benefit. Research Reporting Benefit. Risk Management Benefit. Continuous Improvement Benefit.

Various Forms of Financial Re-engineering Financial Restructuring Corporate Restructuring – Mergers /Acquisitions – Divestitures – Demergers

Financial Restructuring Financial Restructuring is a process to re-arrange, re-build or construct

or form a new financial structure.

Corporate Restructuring Corporate Restructuring is a conscious effort to

restructure policies, programmes, products, processes and people, to serve there defined purpose on a sustainable basis.

Merger A transaction where two firms agree tointegrate their

operations on a relativelycoequal basis because they haveresources and capabilities that together may create a stronger competitiveadvantage.

Acquisition A transaction where one firm buys another firm with the intent

of more effectively using a core competence by making the acquired firm a subsidiary within its portfolio of businesses

Reasons for Acquisitions Increased market power. Overcome entry barriers. Cost of new product development. Increased speed to market. Lower risk compared to developing new products Increased diversification. Avoid excessive competition