10 Factors Influencing Business Process Reengineering

Factors Influencing Business Process Reengineering are: (i) Downsizing (ii) Human resources (iii) Leadership (vi) Quantitative objectives (v) Resistance to change (vi) Implementation time (vii) “Out-of-the-box” thinking (viii) Organisational culture (ix) Concept of human capital (x) Behavioural change !

(i) Downsizing:

Also known as right sizing or man power rationalisation, downsizing in considered as the shortest route to cut costs. Employees in many organisations work under the threat of losing their jobs any time owing to the management policy of downsizing. Because of this feeling of insecurity, their productivity in affected.

The impact of downsizing on the financial performance of a firm is temporary because it cannot go on reducing its manpower forever. Besides, the image of the firm in the market may suffer and when there is a need to increase man power, competent people may hesitate to join such firms.

When an organisation is going through a bad patch, instead of downsizing, the top management should consider reengineering. A few key processes can be identified and reengineered to reduce the costs. The implementation of the reengineered process may be quite inexpensive, thereby eliminating the need for downsizing. Usually reengineering should precede downsizing.

(ii) Human resources:

Human resources are the most valuable of all the resources in an organisation. In a process-driven organisation, the employees at all levels play a major role. They act as intrapreneurs capable of offering valuable suggestions for process improvement. They should be provided with opportunities to play their roles effectively.

The employees must be trained to develop capability to apply their skills as members of reengineering teams, gain more experience and move to the next assignment with better skills and experience. In process- oriented organisations, management should regard employees training as an investment which far exceeds the cost incurred for their training.

(iii) Leadership:

The leader of reengineering team should be from the top management, preferably with technical background. The leader should have personality characteristics needed for the assigned job. Also the leader should be able to handle overt or covert resistance from employees at any level in the organisation.

(vi) Quantitative objectives:

For successfully reengineering processes, one or more major objectives should be expressed quantitatively so that the employees can be motivated.

(v) Resistance to change:

Human beings are resistant to change by nature itself. When the change is major or radical, employees at middle and junior levels of management resist change. While Kaizen involves minor changes in work practices, business process reengineering is concerned with radical changes in current business practices and hence the resistance to business process reengineering is more. Since managers are uncertain about their performance when the processes are redesigned, they are afraid of losing power, authority and even job as a result of implementation of reengineered process.

The employees resist change indirectly by participating without enthusiasm and commitment in the implementation of reengineered process. Hence, to implement business process reengineering, the top management must be totally committed to it and they should be able to deal with resistance from employees of different departments at different hierarchical levels.

(vi) Implementation time:

The success of BPRE greatly depends on the time taken to implement it and the benefits derived from it within that time period. According to Hammer and Stanton, it should not take more than 12 months from the time of starting to think about a process to be reengineered until some substantial benefits are achieved from the change. In this short period of one year, the reengineering team must be able to clearly understand the existing process to be reengineered, examine its sub processes/tasks and evolve ways and means of performing them in a radically improved way, design and evaluate the prototype of the new process and successfully implement the process.

(vii) “Out-of-the-box” thinking:

In BPRE, the emphasis in on “out-of-the- box” thinking or lateral thinking or divergent thinking to generate creative or innovative ideas. People are required to deviate from their traditional paradigms and offer creative or innovative ideas to reengineer a business process. Encouragement and reward from top management sustain the motivation of employees even though few of their ideas may not be successful and find a place in the reengineered process.

(viii) Organisational culture:

BPRE brings about major changes in organisational culture. There is a paradigm shift in the way organisations are managed – from the traditional way of exercising command and control to emphasis on business processes and team work. Vision and mission of the firm are no more confined to top management only, but are shared by middle and junior level managers.

The strategic decision of BPRE should percolate down to reach the lower levels of hierarchy and also to reach every employee of the organisation. Employee participation is crucial for the success of BPRE. The top management should create a culture that enables every employee to have role clarity in the reengineered processes so that they can play their role effectively.

(ix) Concept of human capital:

In a process oriented firm, the concept of assets is not limited to capital assets such as machinery and equipment and cash, but encompasses human resource also. People represent the most valuable asset in a firm practicing BPRE along with knowledge capital (i.e., knowledge of key business process, quality and quantity data base etc.). These assets add value to business in terms of higher customer satisfaction, bigger market share, high profitability etc.

(x) Behavioural change:

BPRE not only involves technological change, but also behavioural change of employees. The management of behavioural change is more difficult than management of technological change. It in the responsibility of managers who are leaders of BPRE to convince employees about the need for change for the survival of business in a competitive business world.

Submitted by : Dr. Alexander, Category : Business, Tag : Business Process