Business Process Redesign Or Reengineering Essay, Research Paper

Business Process Redesign or Reengineering

Business Process Redesign (BPR) or Reengineering is “the fundamental

rethinking and radical redesign of business processes to achieve dramatic

improvements in critical, contemporary measures of performance, such as cost,

quality, service, and speed” (Hammer and Champy, Reengineering). Since the BPR

idea has surfaced it has been under constant ridicule by the popular press.

They say it takes far too long, creates management headaches, fails 70% of the

time, and it’s only for big companies with big checkbooks (Hydrel…). However,

I feel that with the right plan, the right people, and total commitment from

those involved, BPR or Reengineering can work for any company.

The Hydrel Experience

A good example of this is Hydrel, a manufacturer of in-ground and

underwater lighting equipment. They were about to begin selling their products

in the international market, and were afraid their current systems could handle

the rapid increase in volume. So the company president, Craig Jennings, hired

the D. Appleton Company (DACOM) to help reengineer the company’s plans to handle

its growth rate. After DACOM reviewed Hydrel’s functional areas and the desires

of the top-level management, they concluded that the order management and

inventory control process had to be redesigned to meet the demands.

Then they comprised three teams: process, quality, and information. But

before the three teams could work separately, they had to go through a process

to determine if the team members were on the right team, and if they could work

together. So each of the three teams reviewed employee personalities using the

Pearson Personality Inventory (Hydrel…). After using the PPI system they

found that all the teams were compatible, and began working on the job at hand.

The process team attacked the reengineering of the “Manage Customer

Order” process which included all contact with prospects, customers, and sales

agents the moment a question came up. Then they invited customers and suppliers

to air their own issues and ideas about their company. All of them had

something to say about the company and were impressed with the reengineering

effort. The Hydrel process team concluded its redesign work with a delivery

process that removes 37% of the order management activities (Hydrel…). And

also designed a new computer system to carry out the new process. The new

computer system will also be used by the quality team to update their new

metrics system. The quality team developed a completely new system for the

reengineering process. This new metrics system continually updates them on

changes in the market that deal with quality. This is important so they can deal

with the changes right away and stay competitive. And finally the information

team came in to wrap up the whole process and implement the new computer system.

They design a system that fit the current demands but is able to grow and expand

a the same rate as the company.

Due to total commitment from the right people, using the right methods

Hydrel has successfully reengineered the process of order management and

positioned the company for dramatic profitable growth. And they have proved my

statement that reengineering can work for every company no matter what their

size.

The Texas Commerce Bank Experience

In early 1994, Texas Commerce Bank (TCB) launched a reengineering

process called Process Improvement, which included every organizational process

and all 9,000 employees (Betting…). TCB’s goals for their program were:

remove all employee frustrations associated with policies, processes, services,

or products; change processes to improve quality, deliver improved service to

customers, and eliminate unnecessary expenses (Betting…). However, TBC took a

different approach towards their business process redesign. They decided to

approach this as a whole inorder to get maximum involvement from their employees.

TBC had several reasons for this one being; there were already strong

relationships present between bank employees and they didn’t want those

relationships damaged.

However, this idea didn’t last long due to the overwhelming number of

replies from the “Ideas To Bank On,” which was a suggestion box. And TCB was

forced to create about 180 process teams. Which included senior

managers,process managers, team leaders, and about 1,800 employees (Betting…).

This move, however, caused a bit of turmoil in the whole process due to he fact

that, many employees weren’t use to works in groups. And eventually led to the

redesign phase, one that went to drastic measures and wiped the slate clean.

This time, however, the bank knew what it had to do. So this time TCB

moved quickly through the process, and it led to quick results. They began by

redesigning the bank’s lines, question certain products, eliminated processes,

and apply newer technologies. And finally a blue print emerged. Which included

narrative descriptions of processes, new flowcharts, all projects cost/benefit

analyses, and the implementation of strategies. The benefits of this process

were significant: 16,000 ideas, 1005 projects, 1,100 positions to be terminated,

and $43M in reduced expenses (Betting…).

So now that a new plan is in place TCB has taken the appropriate steps

to keep them in working order. The 1,005 recommendations have been assigned to

teams within the line of business. Formal project plans for each team are

developed and gathered weekly and are loaded into a database for tracking by

other interdependencies (Betting…) This database is also available the

employees to access if they want to check on an idea or if they want to suggest

an idea. This database is also a great way for managers and employees to keep

intouch on all aspects of the business, both big and small.

Although this process didn’t run as smooth the Hydrel experience it

still proves that reengineering or BPR can work for a company. Also I think the

TCB experience proved that, there are different ways to go about reengineering a

company but the bottom line is, with total commitment it can work for all

companies.