week 5-Critical view of misuse of Business Process Re-engineering -3rd post

Source / Reference:
1) "What went wrong with the business-process reengineering fad. And will it come back?" by Thomas H. Davenport and Laurence Prusak, with H. James Wilson

Davenport-BPRCritics-ComputerWorld-2003
http://www.computerworld.com/s/article/82290/Reengineering_Revisited

Subject:
Comments about the source article
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Response:

Business Process Re-engineering (BPR) is defined as radical, cross-functional, cross-departmental and cross-enterprise improvement in business processes. Business processes refers to flow of business operation adding value to input and deliver output to target customers.

The article I read is actually an excerpt from a book called “What is the big idea?” The authors of the book criticize misuse of BPR. The limitations of BPR it mentions are misconceptions of BPR means layoff, change is always much led by information technology (IT) employed and too radical change. After reading it, I realize that BPR does not just refer to change in way of business operation using IT, it is also similar to a management strategy, and it has limitations.

It states that it is commonly mistaken that BPR must mean layoff. BPR may not mean increase in number of processes and running costs. For example, a division may be added to cater for new business strategy like new product or new market. In addition, some processes may be rearranged to attain larger extent of specialization, hoping that more skillful staff helps boost productivity. There may be no change in number of staff but change in job specification and position only. Therefore, BPR does not essentially imply cut in head count.

As we all know, BPR involves making use of information system and IT to analyze business performance and processes. However, according to the article, many companies consider using enterprise resources planning (ERP) software like SAP as the start of BPR. They tend to rely on the IT tools a lot. They use IT to push their business rather than pull IT to comply with their business. I agree that the ERP software can help decision making a lot. However, as the author argues, it reduces the competitive advantage as most firms are using the popular software.

In fact, BPR is not necessarily a refinement of many working processes. As stated in the passage, companies tend to change a number of business processes and even the business strategies. It is true that altering business strategies may bring a new image and raise revenue for the firm. However, after all, it is a more risky decision than enhancing business processes one by one. Instead, in my opinion, firms should design a set of business processes which is flexible and facilitates incremental changes and updates. So that they can change their business strategies according to market response and trend. It needs less adjustment to align with the IT tools also.

The authors predict that the BPR in bridging the suppliers and customers will be popular projects. I agree that it is possible. It is because there are quite a number of intermediates between the manufacturers and consumers. It involves large amount of costs. BPR may be an effective way to build and provide a channel. Businesses may need a group of experienced staff to handle inquiries and platform to develop close connection between suppliers and customers. In other words, firms may not perform BPR by cutting the head count. However, if managers take a more risky plan, there may be re-design project for many business processes to streamline the work flow between suppliers and customers.

They also expect that, as new BPR tool grows, firms will find them difficult to integrate with existing IT to equip the business. It results in more employment in BPR consultants. Firms may realize it is not a cost-effective approach to rely on IT in a long run.

In conclusion, managers should have a clear concept on BPR. Firms need to apply with a clear aim and do not blindly follow the trends to attain least negative impact while enhancing business performance.


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Comment on Adrian's week 4 blog:
We have the same stance and we think company should consider different factors. He also mentions that it depends on how the company makes use of the alignment strategy. It is nice to share the research of the case study of a Singapore company. It makes the concept more vivid.