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Business Process Reengineering

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Business Process Reengineering
Business Process Reengineering Analysis and Recommendations
By Maureen Weicher William W. Chu Wan Ching Lin Van Le Dominic Yu Thanks to Dr. Samuel Ryan of Baruch College, City University of New York © Copyright December, 1995. This paper is was written by a group of MBA and MS students at Baruch College. May be freely quoted as long as credit is given. Please send any questions or comments to Maureen Weicher (maureenw@netlib.com). Originally posted on www.netlib.com. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Introduction Old Wine in New Bottles? Is BPR a Quick Fix? The Price of Experience The Role of the Leader and Manager Reengineering the Human Resource Human Reengineering Case Study: The Conquering Power of the Small BPR Places the Customer at the Center by Breaking Down Organizational Barriers Is Information Technology an Enabler or a Bottleneck? Alternatives to Reengineering Reengineering Recommendations Bibliography

Introduction The "jumping off" point for this paper is Reengineering the Corporation , by Michael Hammer and James Champy. The paper goes on to review the literature on BPR. It explores the principles and assumptions behind reengineering, looks for common factors behind its successes or failures, examines case studies, and presents alternatives to "classical" reengineering theory. The paper pays particular attention to the role of information technology in BPR. In conclusion, the paper offers some specific recommendations regarding reengineering.

Old Wine in New Bottles

The concept of reengineering traces its origins back to management theories developed as early as the nineteenth century. The purpose of reengineering is to "make all your processes the best-in-class." Frederick Taylor suggested in the 1880 's that managers use process reengineering methods to discover the best processes for performing work, and that these processes be reengineered to optimize productivity. BPR echoes the classical belief that there is one best way to



Bibliography: 1. 2. 3. 4. 5. 6. Berman, Saul, Strategic Direction: Don 't Reengineer Without It; Scanning the Horizon for Turbulence, Planning Review, November 1994; Pg. 18. Brown, Tom, De-engineering the Corporation, Industry Week, April 18, 1994; Pg. 18. Cafasso, Rosemary, Rethinking Reengineering, Computerworld, March 15, 1993; Pg. 102. Caldwell, Bruce, Missteps, Miscues -- Business Reengineering Failures, InformationWeek, June 20, 1994; Pg. 50. Chew, Angie, How Insurance Firms Can Reengineer for Success, Business Times, June 20, 1994; Pg. 11. Cone, Edward, Technology Chief of the Year; All the Right Moves -- Tom Trainer of Reebok International Successfully Teamed Business Reengineering with Information Technology, InformationWeek, December 26, 1994; Pg. 35. Davenport, Thomas H., Will Participative Makeovers of Business Processes Succeed Where Reengineering Failed? Planning Review, January 1995; Pg. 24. Economist Newspaper Group, Reengineering Reviewed, The Economist, June 1994, Pg 24. Ettorre, Barbara, Reengineering Tales from the Front, Management Review, January 1995; Pg. 13. Furey, Tim R. and Garlitz, Jennifer L. and Kelleher, Michael L., Applying Information Technology to Reengineering, Planning Review, November 1993; Pg. 22. Hamel, Gary and Prahalad, C.K., Competing for the Future, Harvard Business Review, July-August 1994; Pg. 122. Hyatt, Joshua, Real-World Reengineering, Inc., April 1995; Pg. 42. Janson, Robert, How Reengineering Transforms Organizations to Satisfy Customers, National Productivity Review, December 22, 1992; Pg. 45. Kavanagh, John, Challenge for Company Culture - Business Reengineering: The Need for Totally New Thinking, The Financial Times, March 23, 1993, Survey of Information and Communications Technology (19); Pg. IX. Kehoe, Louise, Down in the Dirt to Clean Up IBM/ Louise Kehoe Offers a Contrasting View of Business Process Re- engineering, Financial Times, December 5, 1994; Pg. 8. Leth, Steven A., Critical Success Factors for Reengineering Business Processes, National Productivity Review, September 22, 1994; Pg. 557. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Lloyd, Tom, Giant with Feet of Clay/ Tom Lloyd Offers a Contrasting View of Business Process Reengineering, Financial Times, December 5, 1994; Pg. 8. Lorenz, Christopher, Reengineering in Small Doses Only, The Financial Times, July 1, 1994; Pg. 14. May, Thornton, Not-So-Successful Reengineering, Byte, December 1994; Pg. 45. Moad, Jeff, After Reengineering: Taking Care of Business, Datamation, October 15, 1994; Pg. 40. Moad, Jeff, Does Reengineering Really Work? Datamation, August 1, 1993; Pg. 22. Schnitt, David L., Reengineering the Corporation Using Information Technology, Journal of Systems Management, January 1993; Pg. 14. Strassman, Paul A., The Rap on Reengineering, Computerworld, September 26, 1994; Pg. 119. Taylor, Billy E., Keeping BPR from Being TQMed, Enterprise Reengineering, Jan 1995; Pg. 5. Whiting, John T., Reengineering the Corporation (book review), Industrial Management, November 1994; Pg. 14. 18. 19. 20. 21. 22. 23. 24. 25.

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    References: Caron, M.; S.L. Jarvenpaa; and D.B. Stoddard. 1994."Business Reengineering at CIGNA Corporation: Experiences and Lessons Learned from the First Five Years". Management Information Systems Quarterly, pp. 233-250. Coulson-Thomas, C. 1996. Business Process Reengineering: Myth and Reality. Kogan Page: London. Davenport, T.H. and J.E. Short. 1990. "The New Industrial Engineering: Information Technology & Business Process Redesign". Sloan Management Review, pp. 11-27. Earl, M.J.; J.L. Sampler; and J.E. Short. 1995. "Strategies for Business Process Reengineering: Evidence from Field Studies". Journal of Management Information Systems. 12(1). pp. 3156. Edwards, C. and G. Walton. Change and the Academic Library: understanding, managing and coping. University of Northumbria at Newcastle. http://online.northumbria.ac.uk/faculties/art/informa tion_studies/impel/ Gabel, R.A.; J.C. Kulli; B.S. Lee; D.G. Spratt; and D.S. Ward. 1999. Operating Room Management. Boston: Butterworth-Heinemann. Hammer, M. and J. Champy. 1993. Reengineering The Corporation: A Manifesto For Business Revolution. New York: HarperBusiness. Harmon, R.L. 1996. Reinventing the Business. The Free Press: New York. Harris, H.P. and W.J. Zitzmann, Jr. with 18 contributors. 1998. Operating Room Management: structure, strategies and economics. St Louis: Mosby. Hout, T.M. and G. Stalk, Jr. 1993. “Time-based Results”. The Boston Consulting Group. http://www.bcg.com. Jacob, R. 1995. “The Struggle to Create and Organization for the 21st Century”. Organization Planning and Design, Inc. http://www.organizationdesign.com. Kelton, D.W.; P.R. Sadowski; and A.D. Sadowski. 1998. Simulation with Arena. WCB/McGraw-Hill: New York. Kettinger, W.J.; J.T.C. Teng; and S. Guha. 1997. “Business Process Change – A Study of Methodologies, Techniques and Tools”. Management Information Systems Quarterly. Vol. 21 No. 1. http://theweb.badm.sc.edu/bpr/index.htm Merriam-Webster, Inc. 2002. http://www.m-w.com/ ProModel Corporation. 2002. MedModel Reference Guide and User Handbook. Tan, T.M. and S.B. Chew. 1997. Affordable Health Care Issues and Prospects. Prentice Hall. Wee, E. 2002. “The female doc quota: What some say”. The New Paper. http://newpaper.asia1.com.sg. Weicher, M.; W. Chu; W.C. Lin; V. Le; and D. Yu. 1995. Business Process Reengineering Analysis and Recommendations. Baruch College. http://www.netlib.com/bpr1.htm. Zhang, C. 2001. Supply Chain Redesign in Health Care Industry. Nanyang Technological University: Singapore.…

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    According to Wheelen and Hunger (2010) “Reengineering is the radical redesign of business process to achieve major gains in cost, service, or time. It is not in itself a type of structure, but it is an effective program to implement a turnaround strategy.” TheBusinessDictionery.com defines it as a systematic starting over and reinventing the way an organization, or a business process, gets its work done. Hammer proposed seven principles of reengineering. He believes that organizations should one, organizes around outcomes and not tasks. He proposes that the job of an employee or of a department in the organization should be constructed around an objective or an outcome and not tasks. Two, he suggest that those who use the output of the process should perform the process. This allows for those who need the results of the process to do the process themselves. Three, subsume information-processing work into the real work that produces the information. Hammer believes that those departments that engage in the production of information should also engage in processing and interpreting it. Four, treat geographically dispersed resources as though they were centralized. Technology, Hammer pointed out, provides the ability to keep resources in one place while being able to provide flexible services locally. Five, entails linking parallel activities instead of integrating their results. Hammer proposes that instead of different departments or units working on varying activities that later will conflate, that they communicate throughout the process so the integrating can take place simultaneously. Six, put the decision point where the work is performed and build control into the process. Basically what Hammer is proposing is that those who do the work should decide what happens. However, the process must…

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