Question :
For this report, you are to critically evaluate and write about the business reengineering experience on an information system redesign project. In doing so, you will emphasise on its key functions and business processes, organisational structure and culture and analysis and design approaches.
For the main body of the report, you are advised to incorporate the four part structure outlined below:
Some points to consider are:
Some points to consider are:
Some points to consider are:
Some points to consider are:
The points above are used as examples and should not limit you in your reasoning and critical analysis.
Improvements, based on any identified shortcomings, should be provided in the Conclusion section of your report.
BPR or Business Process Reengineering is the process through which an organization can achieve significant changes in business performance. The changes will be in time, cost, service and quality of service. A wide range of tools, techniques, methods, best practices are related in the BPR process. (Johansson, et al., 1994)
In the following part of this report project management aspects of BRP in organizations will be explored. A case study of a larger government organization will be used for discussion in the rest of the report.
In this part of the report, there will be discussions on the background of the organization, organizational structure, the functional units and processes. These will help to understand the need for redesign and vision of the project.
This report is based on the case study of a large quasi government organisation and the business process redesign for process of delivering compensation and benefits to the employees of the organisation. The organisation under consideration is one of the biggest employer from United States. The process to be redesigned has more than 800,000 employees from different locations in the US.
The organisation structure was quite complicating. There were 5 senior vice presidents in the organisation. Under the vice presidents there were 10 area vice presidents. Under them, there were 85 district managers and there were more levels of functional managers in the organisation. The size and span of the organisation was really giant and spanned over the country. There were a number of field offices under the district offices.
The skills and expertise of the employees were ranged from degrees from high schools to post doctorates from various Ivy League schools. Thus there were different levels of employees. The company was very much focused in advocating promotions from within the company and existing employee base. Their proactive approach in this case gave promotions of the employees to higher level staffing jobs faster.
The most complex matter was communication across the levels in the organisation structure. The headquarters were responsible for issuing different policies. Before getting distributed among the field offices, the policies were needed to go through 2 managerial levels in between. As a result, when delivered to the field offices, the information used to become ‘old news’. Even sometimes, instead of the original information or policy, just a summary was delivered to the field offices from the district offices and other in between management level. Headquarters and filed offices were not synchronised at all and each used to suspect another for any problem. (Mehdi Khosrowpour;, 2006)
The business process that has been considered in this report is, the process of delivering compensation and benefits to the employees of the company. There were almost 12 separate functional units in the process of compensation and benefit delivery.
There were 4 main functional components of the process. Those are,
Any process of an organization or business needs to get aligned with the strategies of the business. In general, for any organization, workforce management is very important for the survival of the business. Compensation and benefits are tools for managing workforce effectively. An effective compensation process should have the following attributes,
An efficient and good compensation program should have a balance among all these factors. A company must be aware that the compensation program is aligned and linked with the organizational culture and objective of the company and the program is able to motivate the employees based on different standards set on their performances.
The components of compensation and benefits process of any company should have subsets of the following components.
Typically a hierarchical structure representing the authorities, right, communication, duties etc. of an organization, is called organizational structure. It also represents how power is allocated to different designations in an organization, how different roles and responsibilities are assigned to different persons. The flow of information through different levels of management is also represented in an organization structure.
The strategies and objectives of an organization are reflected through a centralized structure where the top level management is responsible for the decision making tasks. They have total control over the divisions and sub-divisions following it. In some cases decentralized organization structure is also possible, where the power of decision making is distributed among the departments. Some of the departments may have some level of freedom.
However, in the organization under consideration, the organizational structure is hierarchical. There are senior vice presidents, vice presidents, district officers and area officers. The organizational chart is given below,
If it is looked closely, then the organization chart shows that the area offices are divided into several district offices and field offices. It the done by following a divisional structure. The functional areas of the organization have been divided into divisions. These divisions have their own resources and work independently to some degree. These divisions are created based on the geographical areas. There are total 10 area offices and 80 district offices.
There were a bunch of benefits and compensation programs for the employees. Under the benefits program there were six parts and under the compensation program there were many. Under benefit program, there were plans like ‘cafeteria plan’, health coverage for the individuals and family of the employees, thrift spending account, retirement accounts and many. Most of the plans were not in use for many years. All of these plans were available for employees from all levels in the organization.
The redesigning and reengineering process was for 13 programs. This was needed to be done within a very short period of time, as considered to be completed within 12 weeks.
The processes were working in a very inefficient manner. There were lack of communication, lack of usage of technology, slower and time consuming, poor people management etc.
Thus a redesign was very much needed.
The vision of the project was to reengineering 13 business processes under benefits and compensation program within the 12 weeks’ time span. The reengineered process was supposed to be more aligned with the business process, faster and able to provide values across the business.
In this part of the report the goals of the project, project structure and staffing for the project will be discussed.
The goals of the project was,
The scope of the project was building a better benefit and compensation program for the employees of the organization, accelerating the growth of the organization, helping then to make better ROI, building better strategies and win over the competitors.
The project was supposed to follow 3 stage methodology of redesigning the process. The steps were, investigate, innovate and redesign. After formation of the project team, the team was supposed to document the current processes and then decide on some ‘out of the box’ ideas. Then based on those ideas, the team needed to improve the processes in such a way that the business would be able to maximize benefits from the improved processes. Then there should be an implementation plan for the reengineering process. The in-house reengineering methodologies were being used in the process.
There were two parts of the project team. One team from the consultancy appointed for the project. And another company team consisting of employees from different level and area offices of the organization. The company team members were mainly subject matter experts and had almost no idea about reengineering process.
On the other hand the consultant team members were experienced in reengineering process and were highly qualified. Two different offices were responsible for selecting the team members from different domains. The selection process were also different. The office that manages the process of employee compensation and benefits, selected the company team members. On the other hand, the consultancy that was contracted for facilitation of the reengineering process, selected the consultancy team members.
There was a three step process in selecting the consultancy team members. The steps are,
All team members from the consultant team possessed master’s degree or higher degrees. The project leader on the team possessed a doctoral degree in organizational behavior. There were two more team members in the consultancy team. One had a master’s degree in human resource and another had the same in management.
On the other hand the team selection process for the company team was different. There were more steps followed in the selection process. The steps were,
From the very beginning the process was difficult. Request for selection was forwarded to all area offices. From all area and district offices only 7 employees applied. In a two stage process, the final selection had only 3 of them. A project leader was selected from these three. All three were subject matter experts for the process being reengineered. They had a varying educational background. The highest educational background of the company team members was college degree. Two of the members, one having the college degree worked in same level and had same responsibility at work. Another member worked at lower level and has lesser responsibility. So there is a huge gap between the company team and the consultancy team. The levels of skills, responsibility and expertise was different and that made bad impact on the project. So, the project team was combination of the company and consultancy teams. Other than the project team there was management team. Management team had people like sponsoring organization, contracting officer, and many interested people from information technology, legal, labor union, payroll and accounting sections of the organization.
In this part of the report, there will be discussions on analysis of the process, role of the RFP or Request for Proposal, design and rectification of the process, measurement or benchmarking of progress etc.
The process under consideration was the process of delivering compensation and benefit programs to the customers. It was necessary to visit the local sites to understand the whole process, local viewpoints etc. the project team was divided into groups and divided the sites into three geographical location based categories. Those categories are,
On sites each of these categories the team visited to collect data. Initially, the objective of the visit was to understand the process and finding out the best practice from these sites. Then modifying it and implementing the same. This was useful to shorten the delivery time of the project. However, the process did not turn out to be that much beneficial as there was lack of synchronization among the team. Each of the sub teams did not followed same process for process analysis and data collection. Only one sub team used computerized method for this purpose. Others just used transcriptions and it was hard to work faster from these collections and information base.
A business consists of several processes. Analysis of any business process helps a business to improve its activities and functional areas, reduce cost, efficient resource allocation, better customer service etc. Process reengineering is closely related to it. Process analysis gives ample scope to rethink about the process, modify it and making it more valuable. (Grover, et al., 1995)
Technology is important here. It helps to automate some parts or the whole process analysis part by using streamlining method or automation. A business process analysis also helps to understand where application of technology will be useful. Possible outputs of a business process analysis can be,
This diagram represents functionalities of the business process, its relation to the project and reengineering.
The AS-IS model is focused on the current process, its activities etc. It defined the structure of the process. There are several standards for defining the structure of a process.
Then the TO-BE part of the diagram represents the project of reengineering the process and the outcomes and impacts. The impacts of a process are identified and analyzed during process analysis. Then those are documented for future reference. The size of the project decided the AS—IS and TO-BE models of a business process. The impacts are then studied further during the project of reengineering the business process starts. Those are then documented in the scope document. Scope document is a documentation about the requirements and expectation of the stakeholders.
Information systems provide support to a process analysis project. Before implementation of any such automation tools in the business process analysis, it is needed to be understood first and then documenting the same in the requirement document.
Request for proposal or RFP is an important solicitation for a project. It is a documentation about the ‘bidding’ by a company that is interested in the project. It provides an outline to the cost, duration and other aspects of the project. Thus the organization or project sponsors can decide on the RFPs from several companies that are interested in the project.
A RFP defined the minimum requirement for the project. It helps in feasibility study of the project.
An RFP includes the following information in any case,
Process design and rectification is involved with designing a new business process from scratch. Or as it says, ‘thinking about designing the process from a whole new perspective’. In the redesign process including rectification the business process will be designed around the people, information technology and systems. (Jeston & Nelis, 2014)
The objectives of design of process are,
There may be more than one antiquated processes and methods in a business process. As in the case study of the quasi-government agency, benefits and compensation process, there were many methods and processes that were never used. Application of latest technology can make those process improved and faster. It can eliminate redundant parts from those processes.
Integration of technology with BPR or Business Process Reengineering is a common issue. But before implementation of any technology it should be evaluated to understand whether that is suitable for the business or can improve the business process.
Business Process Reengineering is very crucial for a business. The industry is becoming competitive day by day. For survival in the industry a business needs to reengineer its processes as and when required. Some of the compelling factors towards business process reengineering is,
There are different types of measurements to the improvements of a process from business process reengineering. Those are,
Type 1
The focus of this measurement is the reduction in overall cost from the BPR. It evaluates improvement of the process in terms of cost reduction.
Type 2
It is focused on achieving parity or ‘best in classes. This is a competitive measurement process.
Type 3
This measurement process searches for the breakpoints in the core business processes, then it writes down the rules for evaluating the same.
On the other hand, benchmarking is basically finding out the ‘best practice’ that will give better performance from the process.
There are different kind of benchmarking available. Those are,
Benchmarking for performance
This category of benchmarking will find suitable candidates for studying the benchmarking evaluation.
Benchmarking for process
This category of benchmarking will depend on best practices from the industry.
Depending on the structure of the organization there are three types of benchmarking. Those are, internal, generic or functional and competitive benchmarking.
Internal benchmarking will compare the business process to similar business processes in the same organization. Generic or functional benchmarking will compare the business process with the same in some standard and international company beyond industry or within the same industry. Competitive benchmarking will compare the process against the toughest competitor or international companies within the same industry. (O’Neill & Sohal, 1999)
Benchmarking is a step by step process including the following steps.
Organization
This is the first step toward benchmarking. In this step the process of benchmarking gets organized. The buy in from management is obtained. It communicates about educating the concepts of benchmarking. The planning for overall benchmarking process is done. All concerns and fears about the benchmarking is addressed.
Preparation for benchmarking
In this step the preparation for benchmarking is done. The processes that need benchmarking, are identified. Then a benchmarking team is established. It needs to understand the existing process. Finally the metrics for benchmarking is determined.
Research on benchmarking
Research on benchmarking will help in uncovering the details on who performs same processed, the best performer, what are the useful information needed etc.
Selection of an organization for benchmarking
In this step a relationship is needed to be established with the organization for benchmarking. Then an exchange agreement will be created.
Collection of data and information
In this step data and information are collected from visits to sites, interviews, documents, third parties etc. There should be proper planning of collection of those data.
Analysis and adoption of the process
In this step all related activities for analysis and adoption of the process will be done. The data and information collected from the previous step will be compared. The gaps between the processes will be determined. The goals will be established. Then improved processed will be designed further. Improvements will be estimated.
Implementation of new process
This is the final step in the benchmarking process. The new process will be implemented in this step. There are various related processes to the implementation process. The staffs who will be affected by this process are needed to the trained. Then trial and error method will be used during implementation. The results from the implementation will be monitored. The results will be adjusted and adopted. Finally the whole new implemented process will be adopted.
In this part, it will discuss about the risks management and related challenges in BPR and in relation to the BPR process in the government agency.
As it was clear from the case study of the BPR process in the large government process that BPR processes are involved with high risks if not carried out properly. BPR process is more than mere changes in the business process. It brings radical changes. The factors behind success or failure of BPR process are,
BPR process directly affects the people and their roles in the business. Job is important to any employee. A common fear is about losing the job due to BRP. So, employees become resistant to any BPR process easily. As, it has been seen, there were lack of commitment from the whole organization. Another change in the business process early to the BRP process had led to cut down of employment in the same organization. Thus the employees were naturally reluctant to any other change in the organization. Some of the employees did take part in the project only to secure their jobs. There were lack of participations from the employees selected as project team member. They did not took the project seriously. Lack of dedication in the BRP management team is a stepping stone towards failure. (Langer, 2012)
The BPR team is like the nucleus of the project team. Utmost care should be taken while building the BPR team. The team will be responsible to take decisions on behalf of the organization. There are various deterministic factors to be considered while building BPR team,
A well-built BPR team should have members from top management, different business processes, technical groups, finance etc. and end users. The knowledge and skills of the team members must be mixed with various depths covering the requirements of the BRP project.
But in the larger government BRP process case, it has been seen that the team was not well balanced. There were lack of communication, co-ordination, skill, technical abilities etc. thus the team was not efficient. The root of the problem is inefficient selection of team by the company.
In many cases it has been seen that the organizations just starts the BPR even without understanding and evaluating the requirements and processes. This should not be the case. A basic project pan for the BRP project consisting of the following at minimum should be there.
It is the responsibility of the business to help the BRP team in reengineering the business processes, help them in setting priorities and focus on the related areas to determine the efforts for delivering improvements.
If there is lack of alignment in the BRP and the strategies of the organization then that can lead to failure. The core competency of the company must be considered. Otherwise the whole reengineering process will be a waste. Without alignment with the strategies of the business the sponsors and key stakeholders of the business may find themselves out of focus of the business. (Altinkemer, et al., 2011)
As, in the government project, there were no participation from the employees around all sites, there were lack of alignment with objectives and strategies. Without considering all requirements the duration of the project was set to some unrealistic number that made the project team confused and under tremendous pressure.
Information technology infrastructure is important in BRP processes. It is a very important part of successful BRP project. Some of the factors of successful IT infrastructure are,
Change management involves changes in the social and human factors related to the BRP project. An irony is, there are chances of resistance against a BRP process from the group of users who will be the ones with most benefits from the process.
Organization culture is another important factor behind success or failure of a project. The ability of adopting the changes from a BRP process comes from the organization culture.
BRP is actually an ongoing and successive process. This is a strategy to implement improvement to an organization whenever required. That should be understood.
As information technology is important, so external IT firms plays significant roles in BRP in different organizations. External IT firms provide support for databases, expert systems, decision support tools, telecommunication networks, high performance computing etc.
Other than there are ERP vendors like SAP, Oracle, PeopleSoft, JD Edwards etc. they are prominent players in the IT field related to the BRP in organizations. (Attaran, 2004)
The barriers are enablers of the BRP processes are listed below, (Muthu, et al., 2006)
The enablers are,
On the other hand, the barriers are,
A lot of lessons have been learnt from this project of BRP in large government agency. The summary of the learnings are,
Conclusion
In this report, it has covered several aspects of business process reengineering project management. A case study of a large governmental agency has been considered for the project. In part 1 of the report various organizational aspects related to such projects have been discussed. There is also details of the case study. In part 2 the project scope, visions etc. are discussed. In part 3, process analysis, structure of process, benchmarking etc. have been discussed. Finally in part 4 risks and issues related to failure of BRP projects have been discussed. There is also a discussion on future scopes.
References
Altinkemer, K., Ozcelik, Y. & Ozdemir, Z. D., 2011. Productivity and Performance Effects of Business Process Reengineering: A Firm-Level Analysis. Management Information Systems, 27(4), pp. 129-162.
Attaran, M., 2004. Exploring the relationship between information technology and business process reengineering. Information & Management, 41(5), p. 585–596.
Grover, V., Jeong, S. R., Kettinger, W. J. & Teng, J. T. C., 1995. The Implementation of Business Process Reengineering. Management Information Systems, 12(1), pp. 109-144.
Jeston, J. & Nelis, J., 2014. Business Process Management. s.l.:Routledge.
Johansson, H. J., McHugh, P., Pendlebury, A. J. & Wheeler, W. A., 1994. Business Process Reengineering. s.l.:Wiley.
Langer, A. M., 2012. Business Process Reengineering. Guide to Software Development, pp. 213-224.
Mehdi Khosrowpour;, 2006. Cases on Information Technology and Business Process Reengineering. s.l.:Idea Group Inc.
Muthu, S., Whitman, L. & Cheraghi, S. H., 2006. Business Process Reengineering: A Consolidated Methodology. s.l., citeseer.
O’Neill, P. & Sohal, A. S., 1999. Business Process Reengineering A review of recent literature. Technovation, 19(9), p. 571–581.
Tsai, H.-L., 2003. Information Technology and Business Process Reengineering. s.l.:Greenwood Publishing Group.
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