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Business Process Redesign or Re-engineering

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Business Process Redesign or Re-engineering

Post  MBAstudent on Tue Feb 23, 2010 1:06 am

Business Process Redesign (BPR) or Reengineering 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" (Hammer and Champy, Reengineering). Since the BPR
idea has surfaced it has been under constant ridicule by the popular press.
They say it takes far too long, creates management headaches, fails 70% of the
time, and it's only for big companies with big checkbooks (Hydrel...). However,
I feel that with the right plan, the right people, and total commitment from
those involved, BPR or Reengineering can work for any company.

The Hydrel Experience

A good example of this is Hydrel, a manufacturer of in-ground and
underwater lighting equipment. They were about to begin selling their products
in the international market, and were afraid their current systems could handle
the rapid increase in volume. So the company president, Craig Jennings, hired
the D. Appleton Company (DACOM) to help reengineer the company's plans to handle
its growth rate. After DACOM reviewed Hydrel's functional areas and the desires
of the top-level management, they concluded that the order management and
inventory control process had to be redesigned to meet the demands.
Then they comprised three teams: process, quality, and information. But
before the three teams could work separately, they had to go through a process
to determine if the team members were on the right team, and if they could work
together. So each of the three teams reviewed employee personalities using the
Pearson Personality Inventory (Hydrel...). After using the PPI system they
found that all the teams were compatible, and began working on the job at hand.
The process team attacked the reengineering of the "Manage Customer
Order" process which included all contact with prospects, customers, and sales
agents the moment a question came up. Then they invited customers and suppliers
to air their own issues and ideas about their company. All of them had
something to say about the company and were impressed with the reengineering
effort. The Hydrel process team concluded its redesign work with a delivery
process that removes 37% of the order management activities (Hydrel...). And
also designed a new computer system to carry out the new process. The new
computer system will also be used by the quality team to update their new
metrics system. The quality team developed a completely new system for the
reengineering process. This new metrics system continually updates them on
changes in the market that deal with quality. This is important so they can deal
with the changes right away and stay competitive. And finally the information
team came in to wrap up the whole process and implement the new computer system.
They design a system that fit the current demands but is able to grow and expand
a the same rate as the company.
Due to total commitment from the right people, using the right methods
Hydrel has successfully reengineered the process of order management and
positioned the company for dramatic profitable growth. And they have proved my
statement that reengineering can work for every company no matter what their
size.

The Texas Commerce Bank Experience

In early 1994, Texas Commerce Bank (TCB) launched a reengineering
process called Process Improvement, which included every organizational process
and all 9,000 employees (Betting...). TCB's goals for their program were:
remove all employee frustrations associated with policies, processes, services,
or products; change processes to improve quality, deliver improved service to
customers, and eliminate unnecessary expenses (Betting...). However, TBC took a
different approach towards their business process redesign. They decided to
approach this as a whole inorder to get maximum involvement from their employees.
TBC had several reasons for this one being; there were already strong
relationships present between bank employees and they didn't want those
relationships damaged.
However, this idea didn't last long due to the overwhelming number of
replies from the "Ideas To Bank On," which was a suggestion box. And TCB was
forced to create about 180 process teams. Which included senior
managers,process managers, team leaders, and about 1,800 employees (Betting...).
This move, however, caused a bit of turmoil in the whole process due to he fact
that, many employees weren't use to works in groups. And eventually led to the
redesign phase, one that went to drastic measures and wiped the slate clean.
This time, however, the bank knew what it had to do. So this time TCB
moved quickly through the process, and it led to quick results. They began by
redesigning the bank's lines, question certain products, eliminated processes,
and apply newer technologies. And finally a blue print emerged. Which included
narrative descriptions of processes, new flowcharts, all projects cost/benefit
analyses, and the implementation of strategies. The benefits of this process
were significant: 16,000 ideas, 1005 projects, 1,100 positions to be terminated,
and $43M in reduced expenses (Betting...).
So now that a new plan is in place TCB has taken the appropriate steps
to keep them in working order. The 1,005 recommendations have been assigned to
teams within the line of business. Formal project plans for each team are
developed and gathered weekly and are loaded into a database for tracking by
other interdependencies (Betting...) This database is also available the
employees to access if they want to check on an idea or if they want to suggest
an idea. This database is also a great way for managers and employees to keep
intouch on all aspects of the business, both big and small.
Although this process didn't run as smooth the Hydrel experience it
still proves that reengineering or BPR can work for a company. Also I think the
TCB experience proved that, there are different ways to go about reengineering a
company but the bottom line is, with total commitment it can work for all
companies.

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MBAstudent

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