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What is a Business Process?
A business process is a series of activities that provide value to the organization and its end customer. According to Daven Port and Short define the business process as a logically designed task to achieve the desired business objective (Davenport, 1993).To complete a process there might be simple methods which involve two or three steps or it might be a complex method which involves ten to hundreds of smaller process. The interaction of smaller processes is important to higher processes to control the input and output of the organization. Interaction between simple and complex process creates workflow within the processes.
What are the characteristics of a business process?
- Customers In a business process organization defines the outcomes and the end customers who are willing to pay for the outcome. There are two types of customers. The customer might be the end-user of the process and the outcome will be the final product. These types of customers can’t influence on business process. The second type of customer is the internal customers who are part of the process chain and who can affect the process.
- Cross-Organizational Boundaries Cross organizational boundaries mainly happen between organizational subunits and organization which use half-finished goods as input. For example, the rubber which is volcanized is the input of tire manufacturing.
Business Process Reengineering
Reengineering Business Process Reengineering involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality. (Rigby, 2015)Companies adopt a new value systems that will identify demand in customer needs. Reduce of organizational layers will eliminate none value addition activities and waste activities. Creating cross-functional teams and technology will improve information distribution and decision making.
what are the purposes of business process reengineering?
- The purpose of the business process reengineering is to re-invent the processes to improve effectiveness, BPR is not automation is or improvement of current processes.
- Reengineering can be divided into two main categories. withdraw from the current processes and enhance the innovation process. Creative rethinking about the value chain and current business processes will impact on organizational sustainability.
- Re-engineering can be called the new way of identifying the planned output of the business process and designing a convenient way of doing the process. According to davenport said that engineering means “the radical redesign of broad and cross-functional business Processes with the objective of order-of-magnitude performance gains.”(Davenport, 1993).
- The main focus of reengineering is to remove the outdated rules and fundamentals assumptions that are based on business processes. (Hammer, 1993) .
- According to Hammers research recognize that many of the organizations lead to building a system on the control that transfers information to higher levels in the hierarchy to decision-makers who presume to know the value of information.
What are the principles of business process reengineering?
This decentralized process has made drawbacks in the organization which impacts on overall organizational performance. Hammer suggested that an organization should come out of the old assumptions and break the business rules. Furthermore, Hammer identified the principle of reengineering and summarized them as fallow;
- Organize around outcomes, not tasks.
- Have those who use the output of the process perform the process.
- Subsume information-processing work into the real work that produces the Information.
- Treat geographically dispersed resources as though they were centralized.
- Link parallel activities instead of integrating their results.
- Put the decision point where the work is performed, and build control into the process.
- Capture information once and at the source.
What are the benefits of business process reengineering?
Organizations will able to achieve extensive benefits that will affect their revenue and goodwill. Successful implement the reengineering to the inventory management process will affect a wide range of the organization. Since the internal parities of the organization represent the inventory management process, but after reengineering organization will able to share the benefits of regenerating with the customer.
- After reengineering the inventory management process it will become more efficient.so it will be a benefit for an organization to reduce its holding cost of inventory. Through reengineering, an organization will able to increase its revenue while satisfying the customers. So businesses will able to retain their customers with them than their competitors.
- When the inventory management process will become efficient, an organization will able to protect trust with its suppliers by clearing payment on time. IT enables organizations will able to identify fast-moving goods from the business, so it will help to make purchasing decisions.
- With the establishment of effective communication with the suppliers, it will able to get the stocks to the business on time. IT enables management will able to identify the reordering level and reordering the quantity of the stock.so supplies will get notify the stock level of the business without the influence of anyone. So suppliers will able to ship stocks on time before stock level comes zero.
- By reducing the cycle time for each task in the process through reengineering, the organization will able to eliminate their defects that are related to the current business process.it will help to reduce the cost and increase the efficiency and effectiveness of the process.at last organization will able to compete with their and gain high customer satisfaction through the organization’s goodwill.
- Using it enablers with reengineering management will able to become more informative of the organization with the shared information through computerized systems. Management will able to make effective decisions of the organization with the right information.