Business and Management

Reengineering Principles

The standard Reengineering principles are as follows -

1. Organize work around its end results, not tasks

According to this principle, it is optimal to determine the work’s end result rather than dividing the work into small tasks & units. We try to rearrange the work process so that a single person can perform all the steps involved. This eliminates wastage of time due to trailing of work processes through many hands and also puts workers in control of processes. Organizing work around end results reduces the number of intermediate levels of approvals and assign a single concerned personnel to perform all the tasks.

2. Capture data only once when it is first created

According to this principle, the company shall capture & store data only one time when it is first created. In other words, the should avoid redundant data. The company should avoid accepting the same data via input forms that has already being entered in the enterprise database. The use of IT enabled systems such the EDI systems, OLT systems DSS, data warehousing systems EIS etc will help to setup the appropriate information management system for the enterprise that deals with data consistency, integrity, correctness and avoiding data redundancy.

3. Allow decision points where work is performed

In usual work setups, the processes are completely controlled by the managers and supervisors. This often fasten hierarchical management structures. The actual doers are assumed to lack the knowledge or responsibility o take a process to completion. The reengineered process argues that the people who actually do the work should be the ones to make many of the decisions about it, and that the controls over the decisions should be built into the systems that workers use.

Such an approach to work will reduce layers of organizational bureaucracy and changes the roles of workers and supervisors. It empowers the doers to better control their own work environment.

4. Incorporate controls into information processing

While reengineering a business process, we allow the people who collect the information to process the information too. Such controls are incorporated to the information processing system in such a way that usually a single computer could process and store all the related information of a process. The single computer shall process all the data in seconds and at a single location, thus avoiding the process to stretch along the various functions. Now, the person handling the computer system is responsible for the whole process and usually this change in responsibility is a boon to efficiency. Instead of allowing a discrepancy to pass through to several people within an organization, it can be stopped at the source.

5. Make people who use a process do the work

Over specialized and complex processes brings in bureaucracies and will cause people to spend undue time and energy following company policies and strict functional approaches rather than common sense. Make people who use a process do the work means that the reengineered process lets users get their own supplies and information by building controls into the system. If, for eg:, the accounting department requires some stationary items, it should not have to go to another department to administer the process. Instead, the purchasing group shall setup master accounts in a computer system to deal with any sort of purchasing in any other departments indirectly via distributed computer applications and this allow the accounts department to buy the stationary by itself and get the necessary data updated in the purchasing department’s master account.

6. Work in parallel instead of sequentially and later integrate the results

Reengineered business setup enables multiple work projects to be handled in parallel so that the individual projects are linked & coordinated in such a way that the end product development is accelerated without any breakup in between. Reengineering enabled by IT solutions such as the enterprise wide intranets, CAD/CAM systems, manufacturing automation systems, ERP systems, EDI systems, work group internet works etc, supports this work in parallel and integrate results methodology.

7. Treat geographically dispersed resources as one

According to this reengineering principle, the reengineered system will enable the enterprise to integrate the geographically separated resources (man, machine, money, information) and provide a centralized control over these resources. Consider the case of enterprise’s information management setup in the reengineered system. The enterprise wide intranet integrates the distributed data sources and data stores by allowing data sharing, peer-to-peer communication between data applications and a centralized control over the intranet by the IT department. When we take the case of the workforce, we may integrate the workforce of the enterprise towards the common goal of the enterprise by enabling the workers to interact with each other and with the related process via the intranet.

Shared databases, telecommunication networks and standardized processing systems now make it possible to gain the benefits of scale and centralization while maintaining the advantages of the flexibility and service that come from being dispersed and close to the customer.

Why Companies Do Reengineering?

Companies are doing reengineering since they want to remain stable in the dynamic business environment while facing changing strategies, financial crisis due to weak / poor / outdated business processes, technological changes, change in customer demands & business competition. Everyone is going for reengineering since it usually provides a quick fix for the present problem by a suitable business transformation. Everyone has great aspirations while reengineering one’s business, since reengineering surely brings out various potential benefits that usually breakeven the costs of reengineering. The following are the potential benefits brought  about by reengineering that inspires every business enterprise to go for it.

Benefit level 1: Provides a quick fix for the present problem

Benefit level 2: Business processes are refined according to the improved strategies

Benefit level 3: Refined business processes creates high quality products & services, reduced paperwork, reduced manual labor and reduced process cycle times.

Benefit level 4: The above benefit creates high quality and value added products and services shipped to the customers in time. This improves customer satisfaction and customer support. The company now tends to care more for its customers.

Benefit level 5: Cash flow is improved which leads to easy realization of ROI and business profits and gains.

Benefit level 6: This leads to business prosperity and stability.

Article Copyright – Deepesh Joseph (2010)

Reengineering an accounts payable function

Consider the case of approving a loan application. In the manual process, it takes 6 persons and considerable amount of time to accept the details, calculating risks and repayment capabilities and letting the application trail through hands of various functional levels. But, when we reengineer the above process, the whole process may be converted to a PC based applications handled by a single person who performs the formal dealings with the customer & inputs the details on the computer generated form. All further, calculations and checking & further approval of the loan is made by the computer by checking various records of the customer. Here, the reengineered business system is process based since all the trailing levels are capsulated into a single person to perform the process. The benefits of reengineered process lies in the customer satisfaction, reduced business process cycle time, reduced manual labor, reduced paper work and reduced number of persons to perform / complete the process.

Thus, BPR has various potential benefits that leads to long term business stability and process refinements. This prompts every business enterprise to go for BPR when it requires to change its business strategies due to changing customer demands, financial crisis, technological changes and business competition.

Copyright (c). www.getallarticles.com – 2011

Creating Process based Organizations via Reegineering

While reengineering a business enterprise, we create a process based organization structure for the enterprise to avoid the inefficiencies and time wasting business process cycles as in a functions based organization. ie – the business process information systems and the enterprise wide information infrastructure are integrated in such a way that the people of various functions or departments could easily form teams for related activities and project works. Such a process based system enables faster business process cycles, workflows and data flows that creates a total quality business setup. The business enterprise is now able to produce its products and services faster and with added value to satisfy its customers.

Often, when we reengineer a business enterprise, a process that took 3 days and 6 persons to get completed, will require say only a single person and a PC and say only 2 hrs to finish the process with all formalities satisfying the business rules.

Copyright (c). www.getallarticles.com – 2011

Basic approaches to Reengineering

The three basic approaches to reengineering are as follows -

1. STREAMLIING

2. INTEGRATING

3. TRANSFORMING 

1. Streamlining – Streamlining approach to reengineering the business offers a basic, segmented, quick-fix methodology for reengineering. It cleans up and treats symptoms but doesn’t  necessarily transform a process nor find a cure for a bad process. It doesn’t change the way a company conducts its core business nor does it impose whether certain processes should exist at all. For eg: while reengineering an accounts payable process, we may reduce the staffs from the existing number to 7. If we follow a thorough transformation approach, this would require total number of 17 sign offs. The streamlining approach of reengineering the accounts payable process may also increase the level of spending authorization for managers. Another approach would be to translate the current workflow and dataflow via electronic means such as EDI. In essence, the streamlining approach to reengineering is simple, functional and makes operations go faster or better.

2. Integrating – The integrating approach to reengineering integrates discrete business processes, replacing them with a unified process that frequently cut across functions and department responsibilities i.e, it creates a process based organization of workflows within the reengineered process. For eg:, when we reengineer a sample business process that formerly required the functional trailing of workflows among various departments such as accounting, purchasing and warehousing, we re-order the workflows so that the individual functions are closely related by reducing redundancies, cycle-times and unnecessary retention of separate receiving logs and lists of prices. Now, the reengineered process will cut across all the functions and will now require only lesser number of persons and manual labor and lesser process cycle times to perform the tasks. But when we consider the business as a whole, the reengineering by integrating has only changed the accounts payable process, but it doesn’t change the way the enterprise produced / manufactured products nor does it directly affect other major functions of the enterprise, but it has a profound influence on the jobs of the people performing the accounts payable process.

3. Transforming - Transforming approach to reengineering transforms the company as a whole. When such an organizational transformation is carried out, the projects should get complete commitment and sponsorship from the top management and support from the working staff. New strategies, policies, objectives and plans will have to be devised to effect the complete transformation. The enterprise shall search for the appropriate technology and workflows to setup the transformed system. The company shall benchmark its existing system with that of another similar company which has already applied reengineering in its system. The company shall seek help from IT consultants to bring in the right infrastructure and IT solutions.

Copyright (c). www.getallarticles.com – 2011

Basic steps in Business Process Reengineering

We can generalize Business Process Reengineering (BPR) efforts as an eight step process as follow -

Step 1: Formulate / Modify business visions, policies, objectives

Step 2: Formulate / Modify business strategies according to changing customer requirements, technology changes and competition

Step 3: Analyze the existing business process cycles & workflows and determine how they may be modified or refined

Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to support the reengineered business process

Step 5: Modify or redesign the existing processes according to the reengineering strategies and develop refined Business Process Automation Systems (BPAS)

Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System (EIMS) that is integrated across the enterprise and that fits into and supports the reengineered Business process cycles and workflows.

Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered  business system

Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology changes and business strategies, which leads to business stability

Since information management is a key factor in BPR, the BPR efforts are enabled & supported by a variety of IT solutions.

Copyright (c). www.getallarticles.com – 2011

What is Re-engineering? Why companies are doing re-engineering?

Re-engineering or Business Process Re-engineering (BPR) is way of rethinking or redesigning the existing business systems both in technical and behavioral terms. The ultimate goal of BPR is to continuously improve the business process cycles so that a total quality is built to the business system, its processes & workflows that reflects as high quality products & services produced by the enterprise. As quality products and services are provided by the enterprise for its customers, customers are able to gain value for the products and services that they buy. This improves customer satisfaction and customer orders. This further improves cash flows and easy realization of business profits and gains.

Now, since BPR leads to continuous business process improvements, the business process cycles and workflows are continuously refined according to changing strategies, technologies and customer demands. This ultimately leads to business stability in the competitive industry / business environment. Since every enterprise is striving for business stability, everyone is going for BPR.

BPR involves considering everything from business strategies to processes to organization structures to management systems (people, machine, money, information) to values & beliefs of the enterprise that undergoes BPR.

Copyright (c). www.getallarticles.com – 2011

Lack of Risk Management and an affected project

Managing the Managers – Showing importance of Risk Management

Suppose you called a meeting with your project team, various experts and the stakeholders, to start the risk planning process. One of the senior people asks, “Why are we doing this, anyway? It’s your job to deliver this project — are you saying that the project is already in danger of going down the tubes?” How would you respond?

Copyright (c). www.getallarticles.com – 2010

Decision Tree / Expected Monetary Value model for risk analysis