If you need a driver of business process reengineering examples, try reading this blog post on the drivers of business process reengineering. Learn about the basic drivers of business process reengineering and how it applies to your organization. In this article we cover what business process reengineering is and major drivers that can help or hinder a business from applying this methodology.
In this article we will discuss business process reengineering accounting tools that help us improve our work and also inform me about business process reengineering application
Business Process Reengineering (BPR) is also referred to as business transformation, business process redesign, or business process change management. It started in the early 1990’s so management could concentrate on adapting to evolving technology and other forces in their specific industry. The focus of BPR is reevaluating and updating business systems to efficiently accomplish numerous improvements in the business’ processes. These changes include reducing operational cost, improving quality and customer service, and staying competitive. BPR utilizes a logical approach for evaluating process weaknesses, identifying gaps, and taking advantage of opportunities to simplify and enhance business operations.
How Business Process Reengineering works:
Business Process Reengineering is a dramatic change initiative that contains five major steps that managers should take:
- Refocus company values on customer needs
- Redesign core processes, often using information technology to enable improvements
- Reorganize a business into cross-functional teams with end-to-end responsibility for a process
- Rethink basic organizational and people issues
- Improve business processes across the organization
Advantages of BPR
- Appropriately concentrates on the business as it revolves around customer needs
- Builds a strategic view of operational procedures by questioning how processes are improved and how things could be done more efficiently
- Eliminates unnecessary activities
- Reduced the number of checks, controls, and reconciliation processes
- Reducing organizational complexity
- Provides improved sustainability and competence to an organization by eliminating lag and unnecessary phases of management and operations
- Overcomes short-sighted approaches that usually emerge from excessive concentration on functional boundaries
- It coordinates and integrates several functions immediately
Disadvantages of Business Process Reengineering
The main problem with BPR is that the type of radical change that is a normal outcome of the process is difficult to impose on an organization. The issue is particularly difficult when a series of BPR changes are required, since they can result in significant downsizing that leads to an employee revolt. A typical outcome is an initial group of BPR changes, after which the effort bogs down and is eventually abandoned.
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The Pitfalls of BPR
Business process reengineering is still discussed today, but not as often as it once was. This is because the extreme nature of BPR initiatives can lead to many problems. And BPR has had negative results – massive layoffs, difficulty for staff adjusting to radical changes to corporate culture, and only mediocre success.
Many BPR projects have failed to produce the results expected because of unrealistic expectations, inadequate resources, loss of management commitment (because they took too long), and resistance to change .
Softer, gentler approaches are now more popular. Instead of dramatic changes to processes, you’re more likely to see gradual innovation through continuous improvement strategies.
Many executives have avoided the BPR approach for fear of causing disruption and disorder in a company. This is unfortunate, because BPR provides a great opportunity to take strong and definitive action to turn a company around. And its fundamental message is strong: don’t just look for ways to do the same things better, because you may continue to do the “wrong” thing. Consider focusing instead on doing different – and better – things, too.
Examples of Business Process Reengineering
Examples of successful BPR transformations are as follows:
- Cost accounting. A company painfully compiles the cost of finished goods based on each item included in a production run. A reengineering effort implements the use of backflushing, where costing is automatic, based on the number of units produced and the bill of materials for the items produced.
- Accounts payable. A company only pays suppliers after a difficult three-way matching process, where supplier invoices are compared to receiving documents and purchase orders. A reengineering effort pays suppliers automatically, based on the number of goods produced in which their parts are used. Prices paid are based on the authorizing purchase order. No supplier invoice is needed, or will even be accepted.
- Payroll. A company pays its employees with checks, which requires that checks be sent by overnight mail to outlying employees, and that employees be contacted later if they have not cashed their checks. A reengineering project eliminates checks in favor of payroll cards and ACH electronic payments, thereby eliminating all of the costs associated with checks.
Business Process Reengineering Steps
The steps for complete business process reengineering are too detailed for this article. Also, BPR’s exact method is significantly influenced by the specific organization and process that’s being examined.
However, some key common elements of any BPR plan include:
- Defining the project (limits and scope).
- Determining the vision for the redesign.
- Creating a plan or model for the redesign.
- Completing a cost-benefit analysis .
- Developing a detailed plan for implementation.
- Establishing performance measures for evaluation.
Because of the radical nature of BPR, it’s vital that organizations think hard about whether it’s the right direction for them before implementing any plans. Here are a few questions to ask yourself before embarking on BPR:
- Is your organization willing and able to endure the pain that BPR can cause?
- Is your top management team personally involved and committed to completing the project? The costs of stopping the process in the middle are high, so make sure you know what you’re starting.
- Are you prepared to lose staff who simply cannot handle the change?
Business Process Reengineering (BPR) is costly, time-consuming and risky. Our process management capabilities let you design, plan and assess BPR in a single process map, ensuring project data can be easily accessed and evolved throughout the entire BPR process and that business process can be transformed seamlessly and error-free regardless of the scale of your operations. That means you can fully focus on process redesign, eliminate hours of unnecessary documentation and communication, and make more efficient use of your valuable time.
Conclusion:
The drivers of business process reengineering are the forces that cause companies to modify the way they do business. The most effective companies, by emphasizing customer needs and focusing on products and services that best meet those needs, are able to stay one step ahead of the competition. When it comes to business process reengineering these three factors can be used as external drivers. These specialized accounting tools will help you put together your own package. Start thinking now about how you can use these important business process reengineering tools.