BPI-Week 1

What a lot of details! - Business Process Reengineering

Business Process Reengineering (BPR) became popular in the 1990’s after it was widely recognized as a way to reduce costs and to restructure an organization in order to break paradigms and create a more efficient company. Companies began to take notice of the potential benefits when large widely known companies adopted the practice and had significant cost savings or increases in productivity.

BPR looks at the company’s business processes from a different perspective so that they could be redesigned. It tried to develop business processes so that they could work cohesively throughout the business. This forced different functions within the organization to be accountable for mistakes made on their part. It promoted communication within the organizations because the different business functions we no longer separated in departments but working together to meet the needs of the organization.

In the 1990’s BPR started to lose popularity. There were many issues that companies overlooked before starting the process because of this many companies failed to implement it effectively.

One of the major problems that slowed the growth of BPR is that companies became insensitive to the needs of the workers. Companies were looking at BPR as a form of saving costs and were using it as a way to downsize. There was also poor work ethic among employees of these companies because there was not enough support of the process by management. Another factor which could have affected the work ethic among employees is the feeling of insecurity in their current positions. If employees feel that the company is going to lay them off they will be less inclined to work efficiently. The resistance to the changes was much more significant than had been anticipated.

Companies were overestimating the potential benefits of BPR in their companies and they were not able to meet those expectations. Many companies were spending more money implementing BPR than what it was worth. This is due in part to the focus on cost savings rather than focusing on value added activities. If companies would have looked at the ways in which the extra funds could have been used to create more valuable products for customers the outcome may have been different.

BPR is still taking place today but in a modified form called Business Process Integration (BPI). In BPI businesses try to integrate the IT portion of processes in order to have more fluid transfer of information throughout the organization. It looks at all of the organizational structures and if needed, these structures will be modified to reduce redundancy.


There are different views on which concepts have taken the place of BPR. One of the concepts that is receiving attention is Business Process Management (BPM).
BPM differs from BPR because it evaluates business process but, instead of eliminating the current processes and starting from scratch, it looks at the ways in which the processes can evolve. BPM also takes into consideration ways of managing people and not only the ways in which information technology can make processes more efficient.

Resources:

Course Notes - Topic 2.4
http://searchcio.techtarget.com/sDefinition/0,,sid19_gci536451,00.html
http://en.wikipedia.org/wiki/Business_process_reengineering#Critique
http://en.wikipedia.org/wiki/Business_Process_Management