Business Process Reengineering

An ICT Approach

Heru Susanto, Fang-Yie Leu, Chin Kang Chen

• Editorial: Apple Academic Press
• Año: 2019
• ISBN:
  9780429949302
• Edición: 1
• Categoría: Business
• Categoría: Information Management

This volume shows how ICT (information and communications technology) can play the role of a driver of business process reengineering (BPR). ICT can aid in enabling improvement in BPR activity cycles as it provides many components that enhance performance that can lead to competitive advantages. IT can interface with BPR to improve business processes in terms of communication, inventory management, data management, management information systems, customer relationship management, computer-aided design, computer-aided manufacturing (CAM), and computer-aided engineering. This volume explores these issues in depth.

CHAPTER 1

THE SUCCESS OF INFORMATION TECHNOLOGY: THE GREATEST EMPOWERING AGENT OF BUSINESS PROCESS REENGINEERING

ABSTRACT

Business process reengineering (BPR) is an approach or business management strategy that focuses on reanalysis of business process, rethinking strategy, and integrating both the usage of information technology (IT) and process redesign in order to achieve a drastic improvement in efficiency as well as to reduce wastage of efforts to start working from the beginning phase until toward the reinvention and guide them to achieve an improvement in performance and revenue. Here, BPR is also a methodology for updating and rebuilding the way the work is carried out to better help the association’s central goal and reduce costs. The utilization of IT is one of the benefits that empowers BPR in both assembly and administration of commercial ventures. It has highlighted the noteworthiness of IT in business method reengineering, and demonstrated that IT is a champion amongst the most prominent strategies which emphasized that enterprises can make their endeavors less requesting, overhaul their affiliation, change the way they work, and fulfill large change using, among diverse engaging impacts. This study will elaborate how the success of IT enables the organizations to empower business reengineering.

1.1 INTRODUCTION

It has been more than two decades since the business process reengineering (BPR) was introduced for the first time as a tool for change in American business sector. The US companies used reengineering as an effective tool for an implementation in order to improve the organization to be more efficient and competitive (Attaran, 2004). BPR is an approach or business management strategy that focuses on reanalysis of business process, rethinking strategy, and integrating both the usage of information technology (IT) and process redesign in order to achieve a drastic improvement in efficiency as well as to reduce wastage of efforts. The concept “dramatic changes” is being used to cover all the projects of the BPR with difference in a wide variety of methods that are mostly based on “continuous improvement” or “kaizen.” BPR encourages in “reinventing the wheel,” that can motivate an organization to start working from the beginning phase until toward the reinvention and guide them to achieve an improvement in performance and revenue (Mohapatra, 2013). However, the process may or may not be successful because every process not only has pros but also has cons as regards organization. This study will elaborate how the success of IT enables the organizations to empower business reengineering (Susanto, 2016a, 2016b).

1.2 METHODOLOGY

This study analyzes how IT is associated with the success of reengineering the business process in order to enhance both the efficiency and effectiveness of the processes in an organization after the implementation. The data collected were mainly from online research and the library. Each member of the group collected at least two journals and two books. Only relevant journals and related books were selected that will be used for the observation in this research. To authentically establish the validity of our research, the selected journals and books are vital for data analysis. A detailed and thorough search was attempted in order to recognize the problems and find solutions that can be applied both in the organization and in IT, which in turn, gradually bring success in the BPR. The difficulties we faced during the research were that we were unable to do our own survey of the various companies, particularly in Brunei, due to the restricted time limit. Nowadays, most companies in Brunei use IT to make their work much faster and more effective. Therefore, the probability of the companies that do not utilize IT in their organization is obviously low.

1.3 LITERATURE REVIEW

In the past, a few studies were done to know more about the outcomes of BPR and the interdependence between IT and reengineering. The following paragraphs are a few excerpts of the outstanding studies that mentioned about IT and competition in an organization when applying the BPR.

Jesse (2013): In his study on “Testing success factors for manufacturing BPR project phases,” Jesse identified some of the aspects for the success of BPR project phases and the advantages acquired from it. The framework was tested with a sample size of about 212 top manufacturing managers, who were plant managers and were willing to share their companies’ struggle regarding their latest BPR project implementation. The results were that some success aspects such as process redesign, changes in adoption of BPR project, and the benefits were given more importance than the actual project phases planned. Except for the nonrelated connection between project inception and process redesign, however, overall the relationships between other phases were related and at times viewed as the major source of success in the subsequent phase.

Khodakaram et al. (2010): In their studies entitled “Interpretive Structural Modeling of Critical Success Factors in Banking Process Reengineering,” Khodakaram et al. analyzed the critical success aspects to consider when planning a BPR project in the banking sector. Interpretive structural modeling is a method that is used to identify the critical success aspects in the implementation of BPR. The aspects mentioned to produce higher chances of success in BPR projects were egalitarian culture, use of IT, customer involvement, change management, top management commitment, less bureaucratic structure, project management, adequate financial resources, and quality management system. It is mentioned that if these aspects were taken into account seriously and not overlooked, the percentage of success in BPR projects will be higher.

Mahmoudi and Mollaei. (2014): In their research titled “The effect of Business Process Reengineering Factors on Organizational Agility Using Path Analysis: Case Study of Ports & Maritime Organization in Iran,” Mahmoudi and Mollaei identified that the objective is to investigate the factors of business reengineering factors. Path analysis methods were used to assess the progress in Ports and Maritime Organization of Iran with 120 questionnaires distributed each to IT, the marine, financial, and training divisions. The questionnaires were rated in a scale from 1 to 5 by choosing how important the following BPR factors were: empowerment, methodology, cultural factors, leadership, communications, performance management, and strategic alignment of IT. The results of the research were that leadership played an important role in organizational agility while empowerment and IT came in as the second and third most important factors than other factors.

Braun et al. (2010): Braun et al. in their research on “Understanding Benefits Management Success: Results of a Field Study” (2010), pointed out their discovery of an exploratory field study on how the advantages of management achievement ultimately provided to better exploit IT and IS divisions. In the research, they had an interview which was semistructured with 34 people that hailed from within 29 business centers. The three dimensions which outline the advantages of the achievement provided were the benefits management capability, benefits management resources, and contextual factors. The analysis alongside paved way for benefits planning competency, benefits measurement competency, and benefits implementation competency.

Thus, Braun et al. concluded that resources alone are not enough to guarantee the success of management process, as contextual factors: business/IT alignment and top management support are also needed in order to obtain higher chances of success in the management process.

According to Venkatraman (1994), BPR is a methodology for updating and rebuilding the way the work is carried out to better help the association’s central goal and reduce costs. As expressed in Sungau and Msanjila (2012) study, the utilization of IT is one of the achievement benefits that empowers BPR in both assembly and administration of commercial ventures. For instance, by completing BPR, banks examined the opportunities provided by IT systems and gadgets to automate and improve efficiency of their organization and accordingly update purchaser reliability, enable e-dealing with a record, fuse appendage frameworks, etc. Meanwhile, in collecting data from industries, the purpose of IT is to reconstruct techniques related to customers, suppliers, and distinctive accessories to handle the business (2000).

Olalla (2000) in his work “Information Technology in Business Process Reengineering” has highlighted the noteworthiness of IT in business method reengineering. His work demonstrated that IT is a champion amongst the most prominent strategies. He emphasized that enterprises can make their endeavors less requesting, overhaul their affiliation, change the way they work, and fulfill large change using, among diverse engaging impacts, IT.

In any association across the world, IT is the greatest empowering agent and driver of BPR. BPR aims to improve client benefit by enhancing profit, disposing of waste, and reducing the cost. The BPR driver aims to recognize the sensational changes by, in a general sense, reconsidering how the work of an association ought to be carried out rather than the minor methodological changes that emphasize on the usefulness or incremental change. Reengineering includes “radical enhancements” and not just a small adjustment made toward an end result. Apparently, to change the design or structure of a system without an IT backing is almost unimaginable. The development of IT gives various alternatives to process execution that were unrealistic past, which opened the likelihood of reengineering in the first stage. There is a relationship between BPR and IT. Hammer (1990) considers IT to be the key execution parameter of BPR.

Organizations that aim at high innovation alone or BPR alone cannot accomplish the same result and business execution is the association that advantages from interdependency between IT and BPR (Najjar et al., 2012). One thing that is just the same as in all procedure change activities is that data innovation is a real segment, paying little heed to the technique. Sledge and Champy (1993) and Irani et al. (2002) expressed that data innovation is a significant segment of BPR. It is becoming more clear that ventures in new IT or BPR cannot exist without the interdependency (Kohli and Hoadley, 2006) and, on the other hand, by simply executing new IT, it will not make BPR work (Lee et al., 2009). IT assumes six roles to play in BPR: limitation, impetus, unbiased, driver, empowering influence, and proactive. With the success of IT playing these roles, it can surely help in business process reengineering.

1.3.1 THE BUSINESS ADVANTAGE OF IT

Hendricks (2013) in a National Edition article stated that IT in businesses can aid a company on securing vital information in the first place. This means that a business can have a backup of secure information or data provided by the consumers, if lost. Secondly, by using IT, communication and collaboration will be made easier. Especially between authority and workers, that when using IT communication can be made better by working at tandem on the internet. Furthermore, there will be a proper way of dealing with the revenue of the company. This shows that using IT in a company can satisfy a consumer because the transactions are properly entered and documented. Lastly, experts using IT can advance the process more because of their skills.

1.3.2 CATCH-22 SITUATION IN IT

As we live in a world of advanced technology, there are still positive and negative situations to be faced (Susanto, 2017a, 2017b, 2017c, 2018; Susanto and Chen, 2018a, 2018b). An article from The Economic Times (2008) stated that IT can help in satisfying customer needs as well as in providing better service. The best thing IT can provide an organization will be the capacity to handle large amount of information that must be processed in the organization. Therefore, if the technology installed malfunctions, the company may be in trouble. Furthermore, to avoid problems, a company that utilizes IT in its business must be aware of terms of security because fraudity is everywhere, especially when it comes to hacking another company. This can be easily achieved by professionals that have expertise in IT (Susanto and Almunawar, 2015, 2016, 2018; Susanto et al., 2011, 2018).

1.3.3 ASSESSING READINESS FOR BPR

Abdolvand et al. (2008) stated that BPR can increase competitiveness as its main advantage. They conducted a research on how to assess this process in order to understand the real use of BPR. This process can actually help a business in terms of sales, consumer service, and innovation as well as help meet their targets, thus paving way for the company’s success. In addition, it can also help in dealing with technological malfunctions and choosing the right strategic options. It is also stated that this process is a useful tool in taking any organization to the next level from their current level of activity.

1.3.4 BUSINESS PROCESS REENGINEERING

As the idea of this tool has been introduced into most business organizations, it paves way for changes in the corporate sector. In The Economist, Online Extra (2009) explains how BPR can help achieving unexpected improvements which can bring success to a company. It has also been stated that it can measure a company’s performance on a daily basis and so it should have the key to identify any weaknesses in terms of factors of production, quality of goods, service given to customers and also speed in product maximization.

1.3.5 CONCLUSION

IT has been used in a business company ...