Introduction
Defining Business Process Redesign (BPR)
Objectives of BPR
Introduction
Efficient and effective business processes are critical to any enterprise that hopes to maintain, or improve, its competitive position. Improvement in quality, time, and costs can result in increased profit. The way an enterprise structures and manages its business processes has a great impact on these outcomes.
Business processes are becoming more important as customers' expectations are increasing and there is a need to become focused on providing customer value. Simultaneously, time-based competition—shorter planning cycles, shorter lead time, shorter product development cycles, shorter product life cycles—is becoming prevalent. Many enterprises are not ready to meet the concurrent demands of customer-focused, time-based, and low-cost competition because key business processes are poorly structured.
Poorly structured processes often result from a history of neglect, rather than poor initial design. Few enterprises pay as much attention to process research and development as they do to product research and development. Consequently, their processes remain static while the environment of the enterprise changes. The traditional organization of business activities into separate functions such as sales, purchasing, inventory management, production, and distribution may be inadequate to support the new cross-functional requirements of the economic environment. Cross-functional requirements become important in a Just-in-Time (JIT) environment in an environment where global demands and rising customer expectations need to be satisfied along market lines. Implementing these changes requires redesigning an organization's business process(es).
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Defining Business Process Redesign (BPR)
According to Hammer and Champy, a business process is a "collection of activities that takes one or more kinds of input and creates an output that is of value to the customer."
Hammer and Champy define BPR as "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." These improvements are a result of analyzing the enterprise's core business processes independently of current reporting lines and functional work units.
BPR involves soliciting input from customers, as well as studying and questioning established practices throughout the organization. It is neither a minor nor an easy exercise. BPR requires changes in organizational structures, management systems and processes, jobs and skills, and culture and values.