Reengineering aims to change the organizational performance using a redesign of the core business processes. The need to speed up the process, improve productivity and efficiency, improve competitiveness, and reduce needed resources resulted in the adoption of reengineering. Business process reengineering aimed to reduce “waste”, as well as integrate business websites “with backend legacy and enterprise systems” (Attaran 585). The inclusion of customers, suppliers, and partners in the process resulted in the emergence of X-engineering. In the 1900s, IT was used to remove barriers between corporate functions. It is assumed that BPR and IT can become natural partners.
IT Capabilities and Reengineering
IT capabilities vary significantly, but they can improve communication processes between customers and employees, improve information access across organizational units, and enhance coordination between them. Gates argued that organizations that strive to be effective need to develop new digital structures similar to nervous systems (Attaran 586). Such systems aim to help companies run smoothly, make responses to emergencies quicker, and ensure that information can be collected quickly. IT is considered to be a key enabler of BPR, as it actively supports BPR, whereas BPR needs to function in terms of available IT technologies. It is assumed that IT can help create new, coordination-intensive structures. Attaran categorizes IT roles into three phases: before process design, during process design, and after completing of process design (586)
Before Process Design
Before the process design, IT can help develop a strategic vision of a company, for example by creating an enterprise-wide information system that will connect retail stores, warehouses, and major suppliers (Attaran 587). As IT can break down organizational and geographic barriers, it can help estimate organizational strengths and weaknesses, as well as evaluate market structure and opportunities. Communication technology can help facilitate process change. It is necessary to find different approaches to manage a process; to utilize this technology, expert knowledge is needed. BPR needs a flexible organizational design, which can support cooperation between departments with the help of cross-functional teams. At the same time, IT staff also needs to develop their skills with regard to marketing and customer relationships to make their efforts more effective. At last, alliances with suppliers and distributors are used to organizations to gain market share, which requires them to collaborate with suppliers and distributors.
During Process Design
IT utilizes project management tools to identify, structure, and estimate BPR activities; together with electronic communication, project management tools can enable standing communication between users and facilitators (Attaran 588). Information necessary for identifying the process for redesign can include modeling and flow simulation. IT can also document business processes, conduct an analysis of the survey data, and even perform structuring evaluation (Attaran 588). IT can also store and retrieve unstructured multimedia information that can later be used for the development of process prototypes. IT technologies can be used to improve the efficiency of the process-oriented approach to system development. In this case, a database is shared across functional units that take part in a business process. Telecommunication technologies can improve processes by providing teams with an opportunity to work on a task directly, thus reducing the time spent on the development cycle. Information presented digitally enhances employees’ work on it. IT also provides databases that can track customer satisfaction, complaints, and feedback, as well as facilitate communication between marketing and sales departments. At last, IT is used to identify alternative business processes.
After Design Completion
The new process should be implemented through the use of project management and process analysis tools, argues Attaran (590). Such tools help manage employees’ expectations compared to commitments. The advantage of the electronic communication is that it helps improve real-time interaction between users and facilitators since it can also overcome geographic barriers. The effectiveness of reengineering efforts also should not be overseen. It is suggested to provide the reengineering team with enough information to evaluate the value of new processes and their influence on the organizational performance. However, while processes are reengineered, infrastructure is not. Cross-functional teams that participate in online collaboration will ensure that reengineering is not pulled back by outdated and unsuitable infrastructure. IT organization and other visions should be altered too, as well as managerial processes in them (e.g., leadership-based and team-oriented approaches might be preferred). Today, pure automation is not enough to provide efficient reengineering. Digital feedback loop can help in estimating the definition of success, milestones, tasks, and budget.
Current State of Reengineering: Examples
Using reengineering, companies were able to achieve significant improvements in their business processes. For example, Cisco Systems used web-based automation of online sales, which eventually resulted in 75% of sales being handled online. Dell Computer uses IT to “fulfill individually customized products”, which reduced company’s inventories to a five day’s worth (Attaran 591). Frito Lay provided employees with handheld computers that we’re able to save up to 50.000 working hours annually. Prifzer Inc. changed the process of document management, which helped the company reduce the duration of drug timetable approval in half. Texas Instruments improved organizational efficiency and job performance of employees by using a global network that allowed various teams work on pre-design without meeting in real life. At last, Wal-Mart uses a satellite system to ensure quick data transmission between its offices and sites (Attaran 592).
Seven-Eleven Japan’s Information System
The system allows the company transmit information among stores, headquarters, and suppliers, which improves business effectiveness.
Barriers to Implementation: Wrong Approaches
Despite the fact that many organizations tried to implement reengineering, it remains to be seen as an unfulfilled promise by some due to barriers that emerge when organizations try to implement it. Some researchers, e.g., Harari even assume that BPR is dead (Attaran 593). It is important to understand that reengineering is not downsizing, it should not reduce the workforce or positions but rather work. It is also not restructuring since the main aim of reengineering is to track how the work is done but not to pay attention to organizational restructuring. It should not be perceived as a tool that provides new solutions for old tasks but rather a tool that “enables new process design” (Attaran 594). As such, the concept of reengineering remains to be misunderstood, which leads to a failed usage of it.
The first barrier is the misunderstanding of the concept. It is a process that relies on management and innovation; it will require a revision of organizational processes. Reconfiguration of work, focus on desired outcomes, and a new way of thinking are all parts of the reengineering process. Vertical organizations and promotion and compensation do not work anymore (Attaran 594). Reengineering should not be perceived as a cheap process. What is more, it also cannot replace TQM or other organizational initiatives and schemes. It relies on hard work of employees and managers alike.
The reason behind BPR’s failure is also due to executives’ misunderstanding of its relation to clear organizational objectives. If such efforts are not tied to corporate goals, there is a high chance BPR will fail. Reengineering as a process focuses on operations, and only a specific strategy (if used correctly) can indicate what actions are of utter importance. If output goals are not stated in numbers (qualitative expectations), they can be difficult to achieve. Another problem is unrealistic objectives that do not rely on the available resources and people. According to Attaran, reengineering always takes more resources and time than it was estimated (594). As many also remain unaware of whether reengineering programs affect revenues and profits, this also leads to confusion and anticipation based on incorrect prognosis.
The lack of leadership can directly affect BPR implementation, resulting in a potential failure. Although it requires a directive style of leadership, it also relies on independent and innovative people who might prefer non-directive leadership style. Management is also affected, and managers learn to provide their job more holistically. Since reengineering also directly affects employees, they need intensive training to acquire skills required by the redesign. At the same time, some employees might express anxiety and resistance, which is why employees’ morale should never be left out of focus. BPR also requires IS redesign, and the inability to provide it is likely to fail.
Conclusion: What Should Be Considered
Various organizational processes should be considered with regard to BPR success. Use of web services for inter-organizational processes, marketing automation for marketing processes, collaborations and management of intellectual property for product development processes, integration of knowledge and information management for analytical processes are factors that impact BPR. As IT can help meet organizational objectives, it can be seen as one of the primary enablers of BPR, but the failure to provide radical change and IS redesign will result in BPR’s failure.
Attaran, Mohsen. “Exploring the Relationship between Information Technology and Business Process Reengineering.” Information & Management, vol. 41, no. 5, 2004, pp. 585-596.