BUSINESS PROCESS REENGINEERING
According to Dr Michael Hammer, who introduced the concept of reengineering, "Business reengineering is 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."
Business Process Reengineering (BPR) advocates the complete overhaul of the existing systems and processes in an organization in order to increase productivity, reduce costs and improve business practices. To understand the reengineering processes better, we have to see what constitutes a business process. According to Davenport and Short, a business process is "a set of logically related tasks performed to achieve a defined business outcome." Davenport further expands the definition as "a structured and measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization." Organizations can improve these processes by analyzing the existing processes and identifying the scope for improvement. Another way is to completely rethink the process, which is the core concept of business process reengineering.
In the early nineties, it was assumed that the only way to improve the fundamentals of a company was by downsizing. But this narrow view of restructuring was overtaken by BPR, which has gained acceptance throughout the world. Many companies have created special cells for the implementation of BPR. BPR transforms labor and machinery-based productivity to knowledge-and-information-based productivity. In the 1950s and 1960s, companies concentrated on the benefits they could derive from economies of scale by providing standard products and services to customers. But with the increase in competition and the greater sophistication of buyers, organizations were forced to rethink their strategy.
The relationship between a company and its customers is not limited to just the buying and selling of a product or service. It has gained new dimensions and expanded from the buying and selling of products and services to a whole range of business practices from customer service, consulting and pricing to production and distribution. Customers have become increasingly selective due to the availability of a wide range of products and services. These changes in the marketplace have forced companies to rethink about their business processes. BPR makes companies more customer-focused and responsive to changes in the marketplace. These results are achieved by reshaping the corporate structure around the business processes. BPR achieves this transformation, not by automation of the business processes, but by rethinking the company's tasks in a holistic and process-oriented manner.
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