Business Process Redesign or ReengineeringBusiness Process Redesign (BPR) or Reengineering is “the fundamentalrethinking and radical redesign of business processes to achieve dramaticimprovements in critical, contemporary measures of performance, such as cost,quality, service, and speed” (Hammer and Champy, Reengineering). Since the BPRidea has surfaced it has been under constant ridicule by the popular press.
They say it takes far too long, creates management headaches, fails 70% of thetime, and it’s only for big companies with big checkbooks (Hydrel…). However,I feel that with the right plan, the right people, and total commitment fromthose involved, BPR or Reengineering can work for any company.
The Hydrel ExperienceA good example of this is Hydrel, a manufacturer of in-ground andunderwater lighting equipment. They were about to begin selling their productsin the international market, and were afraid their current systems could handlethe rapid increase in volume. So the company president, Craig Jennings, hiredthe D. Appleton Company (DACOM) to help reengineer the company’s plans to handleits growth rate. After DACOM reviewed Hydrel’s functional areas and the desiresof the top-level management, they concluded that the order management andinventory control process had to be redesigned to meet the demands.
Then they comprised three teams: process, quality, and information. Butbefore the three teams could work separately, they had to go through a processto determine if the team members were on the right team, and if they could worktogether. So each of the three teams reviewed employee personalities using thePearson Personality Inventory (Hydrel…). After using the PPI system theyfound that all the teams were compatible, and began working on the job at hand.
The process team attacked the reengineering of the “Manage CustomerOrder” process which included all contact with prospects, customers, and salesagents the moment a question came up. Then they invited customers and suppliersto air their own issues and ideas about their company. All of them hadsomething to say about the company and were impressed with the reengineeringeffort. The Hydrel process team concluded its redesign work with a deliveryprocess that removes 37% of the order management activities (Hydrel…). Andalso designed a new computer system to carry out the new process. The newcomputer system will also be used by the quality team to update their newmetrics system. The quality team developed a completely new system for thereengineering process. This new metrics system continually updates them onchanges in the market that deal with quality. This is important so they can dealwith the changes right away and stay competitive. And finally the informationteam came in to wrap up the whole process and implement the new computer system.
They design a system that fit the current demands but is able to grow and expanda the same rate as the company.
Due to total commitment from the right people, using the right methodsHydrel has successfully reengineered the process of order management andpositioned the company for dramatic profitable growth. And they have proved mystatement that reengineering can work for every company no matter what theirsize.
The Texas Commerce Bank ExperienceIn early 1994, Texas Commerce Bank (TCB) launched a reengineeringprocess called Process Improvement, which included every organizational processand all 9,000 employees (Betting…). TCB’s goals for their program were:remove all employee frustrations associated with policies, processes, services,or products; change processes to improve quality, deliver improved service tocustomers, and eliminate unnecessary expenses (Betting…). However, TBC took adifferent approach towards their business process redesign. They decided toapproach this as a whole inorder to get maximum involvement from their employees.
TBC had several reasons for this one being; there were already strongrelationships present between bank employees and they didn’t want thoserelationships damaged.
However, this idea didn’t last long due to the overwhelming number ofreplies from the “Ideas To Bank On,” which was a suggestion box. And TCB wasforced to create about 180 process teams. Which included seniormanagers,process managers, team leaders, and about 1,800 employees (Betting…).
This move, however, caused a bit of turmoil in the whole process due to he factthat, many employees weren’t use to works in groups. And eventually led to theredesign phase, one that went to drastic measures and wiped the slate clean.
This time, however, the bank knew what it had to do. So this time TCBmoved quickly through the process, and it led to quick results. They began byredesigning the bank’s lines, question certain products, eliminated processes,and apply newer technologies. And finally a blue print emerged. Which includednarrative descriptions of processes, new flowcharts, all projects cost/benefitanalyses, and the implementation of strategies. The benefits of this processwere significant: 16,000 ideas, 1005 projects, 1,100 positions to be terminated,and $43M in reduced expenses (Betting…).
So now that a new plan is in place TCB has taken the appropriate stepsto keep them in working order. The 1,005 recommendations have been assigned toteams within the line of business. Formal project plans for each team aredeveloped and gathered weekly and are loaded into a database for tracking byother interdependencies (Betting…) This database is also available theemployees to access if they want to check on an idea or if they want to suggestan idea. This database is also a great way for managers and employees to keepintouch on all aspects of the business, both big and small.
Although this process didn’t run as smooth the Hydrel experience itstill proves that reengineering or BPR can work for a company. Also I think theTCB experience proved that, there are different ways to go about reengineering acompany but the bottom line is, with total commitment it can work for allcompanies. Business