2. Introduction
In the first part of this assignment, I
will discuss why the organization should consider BPR, what the objectives of
implementing BPR are, and the different methodology that can
be used. After that, I will try to explore the problems of managing change and
resistance throughout the implementation, which will demonstrate my critical
assessment to the proposition
that the reengineering discourse is dependent upon a partial remembering of the
past in order both to normalize power relationships within organizations and to
represent the present as a success. In the second part, I shall suggest how the
BPR programme might be implemented in a department within an insurance company
in Saudi Arabia
3. Part I
3.1 Business Process Reengineering (BPR)
BPR was first introduced to the
business world by Frederick
Taylor when he published his article The Principles of Scientific
Management in the 1900s. Following on from the earlier ideas of Time and
Motion Studies pioneered by Frank
and Lillian
Gilbreth, Scientific Management was the first step to the
introduction of BPR which turned out to be unsuccessful due to the many issues
which were not resolved[1].Michael
Hammer and James Champy introduced their book "Reengineering
the Corporation", which gave the birth to the term business process
reengineering.
Business Process Reengineering
(BPR), also know as Business Process Redesign[2],
Core Process Redesign[3],
Process Innovation[4],
or Business Engineering[5],
is a concept within the field of change management. Numerous definitions of BPR
are found in the literature. However, all definitions agree that the processes
start with the customer and their satisfaction. The most cited definition of a
business process is probably Hammer & Champy definition. They defined BPR as "'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..."[6].
They have characterised the tree driving forces behind reengineering as the
three Cs, which are Customer, Competition and Change. However, Johansson et
al added three more, which are Cost, Technology and Shareholders[7].
Organizations benefit from BPR in
three ways: cost savings, time savings, and reductions in defects. The two
cornerstones of any organization are the people and the processes. BPR is the
key to transforming how people work. What appear to be minor changes in
processes can have dramatic effects on cash flow, service delivery and customer
satisfaction. The following organizations are an example[8]:
- Citibank increased profits by over 750 percent by reengineering a
credit analysis system.
- A reengineering effort at CIGNA RE sped up document processing,
even though the number of employees was reduced almost by half.
- Kodak reduced the time required to develop a camera by more than
half. Given the compelling benefits of a successful reengineering effort.
It is not difficult to understand why so
many companies are pushing reengineering efforts.
3.2 The Objectives of
Implementing BPR
The
overriding objective is to achieve a step change in performance. Performance
improvement relates to internal efficiency and competitive advantage. Internal
efficiency is achieved by examining how we can run the business with fewer
hand-offs, barriers, formal communications and less waiting time. Competitive
advantage often involves working with the customers on assisting them with
their business so that you can both be more effective. BPR has three key target categories[9]:
●
Customer Friendly: One of the main goals of introducing BPR is to get a
competitive edge and that can only be gained by providing the customers more
than what the others in the market are asking for.
●
Effectiveness: Whatever product or service the business might be providing to
the customer is successful, and then the customers would automatically want to
buy that product or service again.
●
Efficiency: How efficient is the company that is manufacturing the product
before introducing it to the market to minimise costs? This is one of the key
categories that are believed to be more important than any others.
3.3 BPR Methodology
There
are two approaches to BPR that can be found in the literature. The methodology
originally prescribed by Hammer and Champy is a top-down approach[10],
which suggests that the BPR team should focus on determining how the strategic
objectives of the organization can be met without letting its thinking be
constrained by the existing process. The other approach outlined by Harrington
is a bottom-up approach which advocates modelling the existing process to gain
understanding of it, and then streamlining it appropriately to meet the
strategic objectives[11].
The focus is on changing the as-is process by identifying opportunities for improving
it. In practice, a BPR team will ordinarily need to adopt a mixed approach. If
the top-down methodology is used as the basis, there is still a need to
understand the current functionality and to define carefully the transition
path from the current to the preferred future process. With a bottom-up
methodology, BPR teams can spend too much time on detailing the current process
and lose innovative thinking. A mixed approach would encourage the team to
consider high-level changes without being cluttered by the details of the
current process.
3.4 The Discussion
According
to Hammer and Champy, BPR is about beginning again with a clean sheet of paper[12].
In other words, that in implementing BPR the history should be ignored and we
should concentrate only on the future. However, the ‘past’ must be forgotten
but a particular framing of the ‘past’ is to live on in the memory of an
infinitely superior reengineered present/future. Furthermore, Hammer and
Champy’s prescriptions are replete with such contradictions and as the language
of ‘one dimensional thought and behaviour’[13],
reengineering ‘closes itself against any other discourse’ and seeks to
‘assimilate all other terms to its own’[14].
Therefore, is it assumed that after the implementation of BPR both corporate and
individual identity will be as one and interests will be the same? By looking
to the proposition, we will find that the work of Hammer and Champy support the
proposition, which based on partially remembering the past to form the present as
success. However, McCabe proved in his work that such subjugation is unlikely
because employees do not passively imbibe representations of the past/present. The
human factor should be taken seriously in consideration to implement a
successful BPR. According to McCabe, Memory is to be selectively wiped. The
memory of antagonism and inequality is to be rubbed out whilst the memory of
inefficiency and inflexibility is to be retained so that the new will seem all
the better. Yet the intense disciplinary control over work, large scale
redundancies, and temporary and insecure forms of employment, contradict and
undermine such a partial memory loss. According to McCabe, these conditions fan
the flames of memory just as the reproduction of antagonistic and bureaucratic
relations compound the sense in which the past lives on. Therefore, BPR
presents a big problem than some managers and gurus seem to assume. This should
take us to the proposition that seems to ignore this problem.
According
to Knights and Willmott, analysts have generally failed to expose relations of
power and domination that underpin the construction and reproduction of what
may appear to be a "shared system of norms and values" within work
organizations. Whether the focus has been upon the organization as a whole or
upon occupational' 'communities" located within it[15],
understanding has generally been limited to perceiving corporate cultures as
founded upon mutuality and consensus, not upon coercion and compliance. The
tendency to overlook (or naturalize) asymmetries of power in organizations has
been most transparent among writers who have promoted "culture" as
the most recent panacea for the managerially defined problems of commitment and
competitiveness. The studies of organizational culture and symbolism might
usefully attend to forms of power that categorize or differentiate individuals,
mark out their identity (e.g., as managers), and generally subject them to
"a law of truth" that those in power recognize and others are obliged
to recognize in them[16]
. From this perspective culture is as lifeless and mechanical as the concept of
reengineering itself – subject to the dictates of clock time, precision and
schedules. It reflects a belief that boundaries can be drawn whereby staff will
forget the past and even their everyday life experiences. However, people can
not forget their past and life experience. Therefore, we should not adopt any
thing that incompatible with lived experience in implementing a BPR programme.
As proved in McCabe work, within such simplistic prescriptions lie the seeds,
if not the bloom, of continuity, diversity and dissent; for culture is a
creative living process rather than a programmable destination to be arrived
at. According to Knights and Willmott, culture is explored in terms of how it
emerges from constant processes of contest and struggle whilst recognizing that
‘unity and division’ may exist ‘in tandem’[17].
The approach rejects an understanding of culture as stasis whereby change is
seen as a shift from one discrete end-state to another (i.e. past, present,
future)[18].
Of course, gurus and practitioners prefer end-states because they are easier to
communicate, extol and understand. Employees, and culture, are not objects that
can be switched from one state to another but are continually in process. Davenport Davenport
However,
the most serious problem in reengineering business processes is resistance to
change. Many people will go to great lengths to avoid adapting to new ideas and
ways of doing things. Hammer and Champy see poor management and unclear
objectives as the main problems to Business Reengineering success. Only just
recently they acknowledge people’s resistance as a major obstacle to Business
Reengineering`s successful implementation[22].
According to Wellis and Rick, It is argued
that management have ‘concentrated on processes’ when introducing BPR and have
‘ignored the people who make them work’[23].The
prescriptive reengineering literature is replete with ‘cultural’ messages,
however, its approach towards, and understanding of culture, is poorly
theorized and inadequately developed.
To
summarized, Hammer and Champy supported the proposition, which based on
partially remembering the past to form the present as success. However, McCabe
proved in his work that such subjugation is unlikely because employees do not
passively imbibe representations of the past/present. The human factor was
ignored on the work of Hammer and Champy. However, Davenport Davenport
4. Part I I
In
this part of the assignment I shall suggest how the BPR programme might be
implemented in a department within an insurance company in Saudi Arabia
4.1 Process for Optimization
The insurance approval process within XYZ insurance company in Saudi Arabia
4.2 Proposed BPR Programme
As
mentioned earlier, BPR main objective is to achieve a step change in
performance. However, the BPR program has three key target categories, which
are Customer Friendly, Effectiveness, and Efficiency. By adopting Davenport
- Identifying process for innovation, the process mentioned above is the process
that requires innovation.
- Identifying change levers, enabling technology should have a serious
impact on the process.
- Developing process visions, BPR is driven by a business vision which implies specific business objectives such as step change in performance,
cost reduction, time reduction, control and output quality improvement.
- Understanding and improving existing processes:
- Describe the current process flow
The
current process within XYZ insurance company for that type of products can be
briefly explained as follow:
Þ The sales
forces of the various distribution channels approach the prospective customers
to market our insurance services or the customer approach the one of the
channels.
Þ The channel
member should manually fill the required form for the specific product and
obtain a copy for the required document from the insurance underwriter.
Þ These
documents shall be forward by faxed or mailed to a specific insurance
underwriter based on the insurance covers required.
Þ Upon the
insurance underwriter assessment, a quotation shall be produced and forward to
requester through the channel.
- Measure the process in terms of the new
process objectives
This
process is a time consuming activity as it requires a lot of manual works,
which it takes on average between 5 to 30 days to have an approval. Also, it
shows a great lack of control by the channel management.
- Assess the process in terms of the new
process attributes
The new process
attributes should allow us to overcome the weakness of the current process and
it allows the organization to increase the level of business.
- Identify problems with or shortcomings of the
process
The
main problem of the current process is that the customer could be approached
twice or evens more by different quotations. In other words, the insurance
underwriter assessment is taken in consideration the commission granted to the
channel while producing the quotation. However, the commission granted is
different from channel to channel. This should result different quotations for
the same insurance coverage.
- Identify short-term improvements in the
process
The short-term improvement
for the current process that could be suggested is to have a shared database for
the requested quotations among the various insurance underwriters within the organization. Also, unifying the
required forms for the various insurance products should be easier to the end
user.
- Assess current information technology and
organization
The level of
information technology within the organization is encouraging to adopt the new
BPR program.
- Designing and prototyping the new process:
·
Brainstorm design alternatives
The suggested
alternative is to have software that should facilitate the requests from the
various distribution channels to the insurance underwriters within the organization. This software would give the organization a
great control on that activity.
·
Assess feasibility, risk and benefit of design alternatives
It will help the
organization to achieve their business objectives in performance, cost reduction, time reduction,
control and output quality improvement.
·
Select the preferred process design
·
Prototype the new process design
·
Develop a migration strategy
·
Implement new organizational structures and systems
The
five high-level reengineering activities mentioned above can be decomposed into
a set of lower-level activities. In steps four and five, I add a listing of the
second level activities corresponding to the redesign. In addition, I did put
my comments to explain these activities further. However, the proper implementation
requires more information and analysis.
4.3 The
Effects on the Existing Control System
There are many reasons organizations don’t manage processes well.
When different departments are involved, it’s not unusual for power struggles
to arise over ownership of and responsibility for different aspects of the
process. The current business process in XYZ insurance company demonstrates
that clearly. There are different department involved on the process. However, the
focus on the new BPR programme is clear to overcome that obstacle.
The new BPR
programme will be Preventing employees from abusing processes; traditional
organizations fill each process with checking and control activities. However
on the current process, establishing these non-value added control points along
a process increases the process duration and cost. The new BPR programme will separates
checking and control steps from each individual process. According to Hammer and Champy[25],
conventional processes are replete with
checking and control steps, which add no value but are included to ensure that people
aren’t abusing the process. For instance, in a typical insurance approval process, the channel member checks the request form to ensure
that all the necessary information is fulfilled in the request form. After
reengineering, this control activity is removed from the insurance approval process. Instead, the insurance approval process is controlled by the software that will be
designed to facilitate the process. With the implementation
of the process on an automated workflow management system, the need for these controls
is considerably reduced. The processes enacted are managed by the system and
managers need not stop the process to check the status of work. They can simply
query the workflow engine for status information and can electronically
communicate with the assigned employee.
Mutual Benefit Life is an example for the effect of new BPR
programme on the existing control system in any organization. Mutual Benefit
Life reengineered a thirty-step insurance approval process performed by 19
people in five different departments. Approvals took from five to 25 days[26].
A case manager now has the power to grant approval and performs the entire
approval process. Mutual Benefit Life eliminated several layers of supervision
and control, and the supervisors who remain are responsible for facilitating
the work of case managers. Case managers are also supported by an expert system
and by specialists who help them with particularly difficult applications.
Turnaround time improved dramatically since there is no need to pass
applications from one person to another. There are fewer errors, and costs
decreased substantially. Case managers handle twice the volume of new
applications, allowing the company to eliminate one hundred field positions.
To summarize, the new BPR programme will eliminate these non-value added control points. The need for these
controls is considerably reduced with the implementations through an automated
workflow management system. There will be fewer errors, and the costs will
decrease substantially.
5. Conclusion
In this assignment by using the
textbook and other references, I have discussed the propositions that the reengineering discourse
is dependent upon a partial remembering of the past in order both to normalize
power relationships within organizations and to represent the present as a
success. However on the second part, I have suggested a BPR programme for an
insurance company in Saudi
Arabia
6. Limitation
of the Sample
My answer to the questions in this
assignment is based on a limited amount of references. Therefore, my assessment
could possibly be limited because of the limitation of the sample. Regarding
part two from the assignment, we should also keep in mind that BPR is purely a Western
study and the possible the on-going effect of implementing a BPR programme upon
the existing control system in Western world could be different in our part of
the world due to culture differences. In addition, the BPR is a new business
practice in Saudi Arabia
End
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(1993),
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[7] Johansson, H.J., McHugh, P., Pendlebury, A.J., and W.A. Wheeler III.
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James Champy (1993), Reengineering the Corporation: A
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Boston , MA
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D. (2004) 'A Land
of Milk
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[18] McCabe,
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[19] Davenport Boston , MA :Harvard Business School
[20] Davenport
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[22] Davenport
[23] Wellis, R.
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