LITERATURE REVIEW

Defining BPR:

Business Process Reengineering was an idea put forward by Michael Hammer, father of reengineering, in the late 1990’s when he published his article “Reengineering work: don’t automate, obliterate” at the Harvard Business Review. The improved results from the article were crucial for many companies that BPR became a trend in 1994. Success stories like ‘Ford cuts account payable headcount by 75%’, ‘Mutual Benefit Life improves insurance underwriting efficiency by 40%’, ‘Xerox redesigns its order fulfillment process and improves service levels by 75% to 97% and cycle times by 70% with inventory savings of $500 million’, ‘Detroit Edison reduces payment cycles for work orders by 80%’ encouraged many companies to utilize the reengineering to attain their own heights. (Hammer, 1990)

Organisations are no longer able to cope with the conventional management mechanisms to get their client’s 100% satisfaction. Due to the increase in number of customers, the level of competition and changes, organisations are currently in such an intense environment with very high demand where mass productivity and high quality of service with lesser turnaround time are required. In this situation, the organisations cannot totally rely on IT alone to meet its business goal. Hence, they need to look deeply into their core business process to meet changes needed. So basically, what BPR is meant for is to redesign the business processes, especially the one which helps in developing the value of the business. With BPR, organisations can analyse the basic business processes and systems, restructure them periodically so that they can be flexible for any kind of future design.

Various authors had their own definitions for reengineering. Petrozzo and Stepper (1994) pointed out BPR is a combination of redesigning the processes, organisation and the IT support which in lead helps the company to attain drastic improvement in time, quality, customer satisfaction, cost and services. Whereas Lowenthal (1994) explains the fundamental rethinking and redesign of the business processes and organisational structure, mainly focused on organisations ability to achieve dramatic improvements in business performance, as BPR’s most essential constituents. Hammer and Champy in 1993 explained that with radical improvements sought more a function of organisational process redesign, rather than IT implementation (Hammer and Champy, 1993). Many other authors have pointed out that reengineering can be performed at different levels in an organisation. For example, IBM improved their costs; time and quality by a large percentage by reengineering their finance process, but had very little effect on overall performance of the company. The three types of companies that undertake reengineering as identified by Hammer and Champy (1993) are:

1. Companies that are in very big crisis have no other options. Examples such as company’s costs being higher than the competitors in the market or than how much its business model allocate and the customer service is failing to satisfy the current customers and they openly rail against them. In other words, the company needs an order-of-magnitude improvement i.e., reengineering in their business.
2. Companies that are not having any crisis now but the management feels that they are vulnerable to a crisis in the recent future.
3. Companies that are doing very god in their business but have a very good opportunity to develop a lead among their competitors.

BPR Tools and Techniques:

Even though are various definitions of BPR, the main goal of BPR is the radical improvement of the processes. However, there are no particularly assigned tools and techniques being used in Business Process Reengineering. This is because authors and various BPR consultants have pursued the use of many different tools and techniques for the best result. Some of the tools and techniques commonly used are as follows.

• Process visualisation:  Many authors suggest that, for processes to be reengineered, an ideal “end state” need to be developed. However, Barrett (1994) suggested that the development of the vision of the process is the key to successful reengineering.
• Process mapping: Cypress (1994) suggests that process mapping/operational method studies, even though they are the mostly neglected BPR technique, are ideally suited to reengineering process. Recent studies recommend that these concepts