Business Processes reengineering has been brought about by a need to revamp the way large corporations do business and move away from the use of automated computer applications to fix every problem. Also, the need to focus on business productivity and the economic affects that mismanagement of Business Processes has on organizations of all sizes. The trends in the economic effects on businesses over the last forty-years shows a rise to higher cost and lower margins, in which case companies turn to more and more of the same process that have been used with no affect. [1]

The idea of Business Process Reengineering is not a new idea, companies starting even before the industrial revolution have tried to revamp the way they do business to save time and money. The term Business Process Reengineering began in the early 1990’s with the release of the book from Hammer and Champy’s “Reengineering the Corporation”. The concept Business Process Reengineering is not a new concept but a repackaging of processes that has been around since the 1920’s when Fredrick Taylors wrote the “Theory of Management Methods and Procedures Analysis”. [1, 2, 3]

The revamping of business processes uses strategies to make the business more flexible, to save money, and time. Below are some of the methodologies that have been created and adopted by corporation all over the world. [3]

· Business Process Reengineering (BPR)

· Change Management

· Performance Management

· Six Sigma

· Work Flow Management

· Orchestration

· Real-Time Enterprises

· Agility

At the heart of business processes are practices that involve people, information systems, communication, organizational design, resources, assets, and constraints. [3] Business Processes is the product or the way a product is made. Processes with no outcome or goal to produce a product will always fail. The way to refine process depends on the businesses ideal outcome. If a company produces cars then business process should always work to furthering the production of making cars. If the business is service oriented such as a restaurant then the process should help provide food faster with higher quality. The idea of business processes should never further pet projects that have no bearing on the production of a product.

It is my opinion that most companies start business process with good intentions but lose the meaning of why they originally created the process. In most cases a process will live in a companies practices with no revision almost indefinitely. Also, businesses that are regulated by government agencies are plagued with unneeded business process that actually works against the business over time causing the business to hire more employees than they need. Regulatory business processes or unneeded processes can also cause businesses to become more unreliable, waste more money, and waste talented people on mundane tasks that neither make money for the company nor produce a product.

Most IT organization in large corporate environments today are cost centers. The IT departments fall into the same trap over and over of providing automated processes that doesn’t help the actual business. An example that I have seen is a DBA spending their time running meaningless reports for upper management to show how many times users passwords get locked out. This would be fine if the upper management would agree on how to create a short process to unlock user accounts and who would be responsible and how to achieve a desired outcome. But, the DBA has the report ran every week and sent to management. Although the report eventually became automated the report produce no good or desired outcome, it has been four years with no change. And if the report does not run then the management team actually asks the DBA for the report. The management team does this because they need numbers to show their management that we watch our metrics. Do something about the outcome do not create processes to produce unused numbers that doesn’t make the company money!

In conclusion the need for Business Process Reengineering is simple, each group within each department needs to review the processes that directly affect their productivity. If it makes the production of the product better then continue doing the process. If your business processes don’t make sense then why continue using that process?

The definition of insanity is to do the same thing over and over and expect different results.

Reference:

1. 1. ) www.strassmann.com/pubs/reeng/roots.html

2. 2.) http://www.easy-strategy.com/michaelhammer-and-Jameschampy.html

3. 3. ) http://www.bptrends.com/publicationfiles/bpm%20third%20wave%20smith%20fingar%20apr2003%2Epdf

EE615 Blog for Brett Elrod

January 13, 2011

Business Process is, simply, the logical ordering of the collection of activities required to produce a product or service. Not all processes are good but many times they happen naturally with little or no documentation. This leaves a lot of room for poor processes to be improved upon. More times than not a companys processes need serious thought can often be modified to yield various results that should be more efficient, profitable, and on-time. As we engineer and/or re-engineer our approach to business operations we can achieve real and measurable improvements by focusing on the specific deliverables important to stakeholder. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action (1).

Business process can be categorized as primary and support processes. Some processes result in a product or service that is received by an organization’s external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these support processes (2). A mistake often made by process owners is overlooking the support processes. Experienced process owners can differentiate the relationships between primary and support processes important to success because they know how, for example, the refinement of the back-end support processes can upset customers and other stakeholders. How often have you heard that the customer is upset over a billing issue? In this case, where competition is very tight and all other things are equal, a poor billing (support) process can be all it takes for your customer to buy from your competitor. Therefore, as a process owner, we cannot afford to overlook any process that might improve operations. Sure, support process improvements are not as glamorous as primary process improvement but in many cases support process improvement can have significant impact.

Business Process should be viewed as a business tool even though many view it as a concept. Obviously, there are individuals with exceptional business process talent that can operate at the conceptual level but for the rest of us we need to become proficient with tools like lean BPM and Kaizen.

BPM (Business Process Management) is a well known method of process improvement in todays organizations. With BPM it is essential to measure the ROI by developing a cash flow chart for ‘hard’ benefits, costs, and corresponding criteria” (3). BPM is focused on the business alignment with customer needs. Like Kaizen, this is a continuous improvement methodology. There are many applications available to help process owners utilize BPM methods.

Kaizen is a Japanese tool for continuous process improvement. A literal translation of kaizen could be to become good through change. At its most basic, the concept of kaizen is one of restructuring and organizing every aspect of a system to ensure it remains at peak efficiency (4). Another key concept of Kaizen is that of involving every employee because every employee in the process as all employees are encouraged to submit business improvement suggestions on a regular basis. Without cultural buyoff at the Executive level Kaizen can be difficult to implement.

Whatever the case may be businesses need to perform process improvements with specific goals in mind. A failure to continually improve can mean disaster to a business. There are many paths to achieve business goals and process improvements but larger companies that fail to manage with BPM, Kaizen, etc. run the risk of failing as a company due to a lack of process control. Embracing process improvement and investing in training, techniques, and software tools should be seriously considered to safeguard against changing market factors. Knowing how to work through various business impact scenarios and understanding the relationship between primary and secondary processes will help process owners be more successful and yield measurable results, like saving money, meeting customer timelines, and just about every other facet of efficiency.

References:
1. Thomas Davenport (1993). Process Innovation: Reengineering work through information technology. Harvard Business School Press, Boston
2. Rummler & Brache (1995). Improving Performance: How to manage the white space on the organizational chart. Jossey-Bass, San Francisco
3. http://www.appian.com/campaigns/google/gartnercritical.jsp?utm_ campaign=Google_Gartner_Critical&utm_source=PPC&_kk=BPM&_kt=67475926-4ea6-49b5-8554-2085916bfa67&gclid=CPblkLrBsKYCFUHr7QodzHZSZg 4. http://www.wisegeek.com/what-is-kaizen.htm