Group Assignment A report submitted to Prof. R Raghavendra Ravi In partial fulfilment of the requirements of the course Operations Excellence By Group 6 Avinash Behera (177049) Dipti (177068) Narendra Choudhary(177121) Sanjoy Saha (177171) Swapnil Khilari (177096) Vishal Jaiswal (177239) On 16-08-2017 Business Process Engineering Introduction: Business process engineering is studying current business processes of the organization in order to derive and develop new improved methods to increase productivity and efficiency and thereby reducing operational costs. Many organizations are using Information Technology sectors to redesign their current processes and structures. Consistent proven methods and approach enable easy predictability of costs. Monitoring different KPI’s assists in providing analytical feedback which effectively ensures continuous alignment of business processes with current demands and needs. Most of the business process engineering methods are measurable and can be self-monitored. Moreover, these methods enable continuous loop evaluation, resulting improved results every time. Following are the major reasons why most of the organizations are using Business Process Engineering: Supports internal iterative development Precise automation, assisting in development of new methodologies Aligns current business process with long term and short term goals Enables better collaboration and coordination Provides a framework for business process projects Identifies and monitors unique aspects of every process Establish defined roles for employees A simplified business process engineering lifecycle consist 4 stages. These are: ANALYSIS DESIGN IMPLEMENTATION MONITORING Why Did Business Process Engineering Take Off In A Major Way? Following could be the reasons why organizations are adopting business process engineering. These can be classified into 3Cs. Customers: With the advent of technology customers have become more demanding and sophisticated. In order to fulfil their needs, large range of alternatives are being proposed by the organization which eventually exerts pressure on the suppliers. The technological adeptness has enabled suppliers to identify alternatives from consistent business processes hence, providing customers with their own customized solutions. Competition: The global and local competition have forced organizations to increase efficiency and productivity and simultaneously reduce the overall operational cost. Companies now a days are maintaining database at a larger level. Since, the data itself is very difficult to manage, usually companies approach third party who will observe and analyse data for supply. Change: Continuous innovations and new technology penetrations have enabled organizations to change their structures. Companies are using various methodologies to align their business goals in all departments. It has also assisted in developing consistent collaboration among various business units such as, marketing department, warehouse, manufacturing unit and head office. It has reduced the geo-political differences among the business units and has stabilized a constant communication, thereby increasing flexibility to the process. Organizations are adopting corporate-wide restructuring. Increase in foreign competition, major innovations in technology and slow economies have raised a need to improve current business procedures. Many companies have already recognized the need and are on the verge of administrative restructuring. What Prevented Business Process Engineering (BPE) initiatives: Organizational Resistance: Generally, Business Process Engineering involves drastic change in the way the things are getting done. Therefore the focal persons or Employees of the organizations will have to unlearn existing processes and will have to relearn new processes. This is perceived as an extra workload by them and therefore they usually resist for such initiatives. Lack of long-term and clear goals: The top management of the organization should have clarity about goals, objectives and action plan to achieve those goals through Business Process Engineering. The goals shouldn’t be ambiguous in nature and shouldn’t be conflicting with each other. Many organizations, due to lack of clarity in their goals, keep changing their approaches every now and then and as a result, couldn’t achieve desired results. Also, goals of Business Process Engineering, as per its definition, should be focused on long term goals rather than short term improvements. Lack of proper communication between top management and focal persons: After having a clear set of goals in the mind, the top management should be able to communicate the same to the focal persons, employees and supervisors of the departments of the company to be re-engineered in simple but effective manner. Top management should not only explain the objectives of BPE and its benefits to the organizations to the employees, but it should also keep motivating the employees of the organization on a regular basis. Not able to comply with the above mentioned things is one of the major causes behind BPE failure. Failure to collaborate with Vendors: Vendors are the key stakeholders in any business process. Therefore, they need to be treated as partners, rather than as adversaries, in implementing Business Process Engineering for an organization. In BPE, along with the changes in the organization, it also involves making changes in the way the organization transacts with its vendors in things such as procurement of goods, invoice printing, payment system. If not, the BPE initiatives will be doomed to fail. Lack of proper training and educational support: Many organizations either fail to identify or in some cases overlook the need for training to be given to employees, supervisors, and other stakeholders in order to implement the BPE flawlessly. Apart from above mentioned points, following points also contribute to the unsuccessful BPE initiatives: Lack of proper funding Improper integration of integration systems Major Instances of Implementation of Business Process Engineering: 1. Ford: The process Engineering requires a proper attitude of the employees because the employees may need to take some additional responsibilities. They may need to take proper decisions at the right time. When Ford reengineered its account payable process by instituting ‘invoice less processing,’ the clerks on the dock had to make decisions whether to accept the goods or not. Purchasing agents also had new responsibilities like keeping track of the data whether information about purchase has entered into the database timely, the information is correct and sending the check at the right time. Vendors had to become partners in the shared business process. They were no longer be seen as adversaries. The vendors also had to adjust with the process and changes. The company had to remove any discrepancies between financial record and physical record. In some cases, invoices formed the basis of their accounting systems, but the reconciling cash received against invoices never sent. Without the right attitude, the Engineering process could be a mere failure. 2. Mutual Benefit Life: Sometimes an organization requires changing its culture, policies, and schemes in order to maintain the new process. MBL adopted a new approach to the application handling process by creating a new position called case manager. Case managers were supported by powerful PC based workstations. The company’s job rating system could not accommodate the case manager position because the position had a lot of responsibilities but no direct reports. So, MBL had to change its compensation structure and job rating policies. The company also had to change its culture where people doing work are perceived as more important than those supervising work. Career paths, Recruitment, training programmes, promotions policies are also revised to support the new process design. 3. Teleco: None in an organization wants engineering which changes the work style, process substantially. Mostly the changes are disruptive, and workers get confused. In the mid-1990s, US telecommunications company Teleco adopted BPE to fight against tough market competition. But, the company didn’t have leadership with proper vision, proper communication to the employees, uncoordination among workers. So, it couldn’t deliver the result and ended up losing money and time. It is necessary to have proper vision, knowledge about the change, awareness to get the best out of the change. Otherwise, there is a huge chance of failure. Suggestions for the Implementation Of Business Process Engineering (BPE): As per our previous discussion, it is clear that BPE involves adapting business processes and rethinking to get and achieve high productivity along with gaining competitive advantage. For the success of any organization it acts as a key entity. Following are the suggestions for the implementation of BPE – 1. BPE and IT: Common cause of BPE failures is the misuse of IT practises. To enable any new process IT acts as a key component, as in enabling and streamlining the new processes IT plays an important role. Which in result helps in reducing the inefficiencies of the overall process. Organizations do not succeed as they don’t have proper knowledge and expertise for the use of IT tools and applications. For a proper implementation and utilization of IT tools, proper learning and training system must be there. 2. Commitment for BPE: Commitment towards the implementation of correct initiatives is really important. For the necessary initiatives, it requires financial as well as time commitment. For implementation of BPE, company has to consider the cost which they are going to invest in BPE and the before and after impact of the same. Apart from that company has to consider and check whether current system if fulfilling the needs of the clients and customers or not. Then only to need to invest in the necessary initiatives related to BPE. 3. Ownership of BPE: BPE must be owned and implemented by the organization itself. Company should not give the whole responsibility the outside consultants. Company can take necessary help from outside entities but at the core it should drive the BPE itself. Core team of the BPE must include the top-executives who are not going to retire or going to leave the company. Proper communication is really necessary, all teams involved must be aware of their key responsibilities and the deliverables from their end. All the teams must work as per the timelines of the project, as well as proper communication should be there between managers and their subordinates. 4. Adapting the company structure: Some of the objections to Business Process Engineering may seem to be coming from individual employees or certain departments. However, these may simply be the symptoms. The larger fault may lie in the structure and hence, the culture of the organization. Depending upon the business needs, the structure should be changed so that BPE is easily implemented and decision-making and implementation is fluid in the organization. 5. Hiring proper consultants: All the tasks that are entailed by the adaptation of Business Process Engineering may not be implemented immediately. The resistance may be offered by the employees who do not want to change. Also, having an insider look doesn’t always. Hence, hiring an outside consultant to implement BPE brings fresh eyes on the organization. Also, since the consultants would be an outside entity, they would not be limited in their tasks by the politics and behavioural dynamics of the organization. They could impartially observe the operations of the company and give their constructive suggestions. Also, the employees may exhibit lesser resistance to suggestions given by outside consultants. However, this makes the role of the consultants highly important and hence, they should be hired after due diligence.