Business process reengineering is a customer oriented design mechanism that is made to improve the service to them. It is basically a transformation that tries to make customer experience wonderful and convenient. Management information systems are subject to change and transformation that is supposed to continually make it successful. This process is what is termed as business process transformation, reengineering or change. The major reasons are to improve customer service, customer knowledge of the company among others. It is also important to have greater profits and to have efficiency while doing work. Effectiveness and cost reduction is also important in business. They can be made stronger through greater process knowledge.
In a company, it is important to have the need for greater and continued growth. Therefore, research and development to enhance company targeting and market positioning is critical. A business has many processes and sub processes that require coordination and greater enhancement. This coordination is paramount to the growth of a business and profitability. A company that seeks to grow should look for simple and sure ways of making their various tasks to be easy to follow and to have the customers experience at heart. This paper looks at such processes and why companies need them with regard to two systems (Adelman, 2000).
Processes That May Need Reengineering
There are many processes in a company that may require reengineering. These include:
- Customer service at the reception is very crucial. The receptionist manages the switch board and has direct relationship with clients. That fact makes her the most important person in the company’s public relations. BPR has to come in and help the company to revamp that aspect of the company by coordinating the two functions with others. This will enhance customer service and make it more likable. It is also important to make sure it is in tandem with the goals and objectives of the company (Kotler, 2006).
- Storage of the various materials in a company is crucial. There is supposed to good storage facilities to ensure that quality is not tampered with. This process is wide but also depends on the specific needs of the company. For example a manufacturing company has a number of materials that it needs to store including finished products, partially finished products, and raw materials. With good coordination, there is maximum growth in production which in effect pushes profits. This is also true in the production process which has to be made efficient and workable if the company is to continue enjoying the profits and the objectives it has set out (Kotler, 2006).
The customer reception area needs top be revamped because a number of reasons. Firstly, it is very crucial to the services the company is offering. Good reception means that better business will be done. This is in tandem with a number of facts like the need to have good customer relations and to improve public relations the company seeks to have. If it happens to be disorganized, the customers will definitely feel not well served and first impressions are known to have great impacts. This is very true even in the business world.
Storage of materials is very important as mentioned earlier. It is the basis from a company is able to define loss or profitability. It is that that determines efficiency and effectiveness in a company. If that department is not revamped on a timely basis, there is bound to be a problem in the long run, it is important to have good storage facilities which follow the simple rules of supply chain management. It should recognize safety as it saves on costs of storage such as space and need for proper quality maintenance (Adelman, 2000).
- As mentioned earlier, it is going to save on the costs of business in many aspects and areas. There are many costs associated with above mentioned processes. Storage has the need for space which is supposed to be properly managed. If managed badly, it may lead to cost associated with expiries and damages.
- It leads to greater profitability if well managed. This is because of the efficiency created together with effectiveness.
- BPR in customer service leads to more profits and improves the image associated with company. Once a good public relations is found, the other very important factors like profitability becomes automatic.
- It also improves the communication effectiveness within an entity. Management of information is a very important tool in business success. Information is a pillar of business from which it is founded.
Any process that requires change is faced by many difficulties. The cost associated with whole process is definitely phenomenon. Therefore a company that has other projects that are in comparison may shelve BPR in favor of other projects. Management commitment is another problem that is highly likely to be experienced in the process. The approval needed form the various department heads can be hard to come by. Any change means that the people managing the change have to change themselves. Therefore, a company should employ training mechanisms in case of any BPR planned in a company. This is an expensive affair. It becomes even more expensive if new employees have to be sought (Kotler, 2006).
How to Face Challenges
It is very crucial to convince management to follow through with whole process. This decision will effectively make it easy for the release of funds. The technical parts of the whole process will be tackled by well experienced people who will do quite some good job. Training of employees to acclimatize them will need the commitment of the company and funding so as as to make it a success. All the above have to be planned for and budgeted for. The budgeting process ill have to cater for all the above to make it a success in the end.
Steps in the Reengineering Process
This is the formative stage. It requires full coordination from the various departments and department heads. During this stage the blueprint is made and the whole process is visualized n paper. It is very critical to the success of the process in the end. It drafts the budget of the entire BPR and the training that may be required for its completion.
Modeling and Measurements
In this stage the whole project is visualized and made into reality on paper. The real measurements on the ground are taken and through ratios they are made to look like they would be in reality. It is presented to the management.
Management of Change and Controls
After it ahs been proposed, the technicalities that are involved including the people to be affected are then taken into consideration. Their needs are factored in so as to have their interest at heart. Also any legal detriments to the whole process are tackled at this stage and necessary adjustments made.
Technical Design of the Solution
The blueprint is just an artistic view of the whole process. To implement that there is need for expertise. At this stage, the people to carry out the professional bits that are to be involved are sought for. They undertake the building of the process in detail and to have what the management had approved in the blue print.
Personnel Adjustment and Training
This stage simply has the aim of acclimatizing the real users of the process. Training is undertaken by every one deemed t o be a user of the system. This is meant to have a good working relationship between the users and to deliver the desired results to the clients.
Realization and Transfer of Changes
After subsequent use of the BPR the management can ask the users to propose the desired changes to the process so as to have the real desired thing. This can also be carried out so as to align the BPR to the objectives and goals of the company which may have been added before completion of the project or that may have been overlooked.
Legacy Systems of a Company
Old Storage System
This is a system that has been there since the inception of the company. The company still uses an old financial management system where receipts are kept in safes. Personnel and employee data is also kept in files that are old and the documentation is threatened by a number of factors. The staffs employed are not any where near globalization with lack of computers so eminent. Therefore storage of important documents is not done well and retrieval is always hectic. The storage of materials like daily disposables is still a mess. Also goods and raw materials that are always used in the company are not in line with the principles of supply chain management (Allen, 1994).
Old Financial System
The financial management process in the company is still not professional. It is really disappointing and in need for revamping. Record keeping is a milestone that not any one wants to travel. Issuance of receipts and payments has to be done manually and transfer to online payment methods has not been commenced yet. Accounting standards are not up to date and accountants and record keepers juggle with so much documentation. Filing of tax returns is still done manually and online returns filing is a dream. Usage of computer accounting packages to balance books of account is not effective. The safety of the documents is still in question with fear of fire or stealing of secrets still a major concern. There are major loopholes for the workers and other people to steal from the company as the financial department is bare (O’Brien, 1999).
Need For Change
The legacy systems mentioned above need to be totally revamped and done away with. It is progressive to be in line with the current trend in business and to adopt the various steps ahead that have been taken by the rest. It is rather costly to have manual storage systems. They consume too much space and are prone to many dangers like theft and fire. The most crucial documents however should not be kept in computers as per the current trends because there is increased internet insecurity. However, a computer can accommodate so many documents carrying so much information and much need to be done to have such a storage system. Adoption of such will meant that documents that re not deemed to be too sensitive and can be seen by the public can easily be stored (O’Brien, 1999).
The finance department needs to have an overhaul. Through such an overhaul, the department will enjoy greater security of cash and continued sales. Sales will be enhanced because customers will have better and more convenient ways of payment. Technology like adoption of computer accounting packages will go a long way to ensure cost reduction for the company. This will increase profits. Financial record keeping is another area of interest for the embattled department where there is constant need for change (O’Brien, 1999).
New Enterprise System
The company needs to have a totally new storage department and an overhauled finance department. The best way to do that is to employ technology which will replace the manual ways in which business is handled. This will meant both the people and users need to know how to use the said technology. They can also enhance the existing systems and make them better by incorporating new and diverse methods in it. This is supposed to be simple enough to allow for little training and less jargon (Allen, 1994).
Part C- Outsourcing
Procedure for Outsourcing
Outsourcing refers to the process of sub-contracting another firm to perform a function for the hirer. Globalization has increased its popularity tremendously due to the ease of communication and transport. Supposing an organization was to choose to outsource, there are several frameworks that could provide guidance on this. The framework chosen in this paper has several stages.
First, the strategic implications of the decision to outsource need to be considered. The effect of outsourcing on the company’s product or service should be quantified. Outsourcing has sometimes been found to reduce the product quality. Cost implications are also important. For an organization pursuing a cost-leadership strategy, if outsourcing raises the overheads, then it should not be undertaken. Some organizations derive competitive advantage from performing a certain core competence well. For these, outsourcing may interfere with their competitive position and should not be undertaken. The ideal processes to be outsourced would be non-core activities; those that do not add value directly to the consumer (Gilley, 2000).
Second, an assessment of the organization’s need should be conducted. This will reveal the operational characteristics of the proposed process to be outsourced. The assessment should identify the activity levels of the process, deadlines to be met, manpower or machine requirements and the level of quality required.
Third, the outsourcing solution should be developed. There are three options that could be undertaken: full outsourcing, partial outsourcing and co-sourcing. Full outsourcing involves transferring the entire process to an external service provider; partial outsourcing involves retaining part of the process in-house while co-sourcing would involve sub- contracting more than one firm to perform the process.
Fourth, the service provider needs to be selected. The process of selecting the service provider is akin to that of selecting a materials supplier. Tenders should be put out and the applicants screened according to previously set criteria. The organization culture of the prospective service provider should also be checked for compatibility with the organizations.
Lastly, the contract should be negotiated with the most suitable service provider. The terms and conditions should be considered carefully. The frequency of provision of the service, level of quality and consequences of contract breach should be set out. This contractual relationship should then be managed through frequent reviews (Gilley, 2000).
Risks Involved In Outsourcing
Outsourcing exposes the organization to several risks: operational risks, strategic risks and composite risks. Operational risks refer to those associated with the day to day running of the business. Examples include low speed, poor quality, and high cost. They could impact negatively on the organization’s profitability by increasing costs or loss of revenue due to loss of a customer. These can be mitigated by ensuring that the supplier selection process is rigorous enough and only high quality suppliers are chosen. Business Process Management can also be used to standardize processes to ease their execution (Benslimane, 2005).
Strategic risks affect the whole organization and are related to issues such as intellectual property. This is the risk that outsourcing a process might result in misuse of the organization’s intellectual property needed to perform the function. This, combined with issues of security could easily destroy the organization’s competitive advantage. Strategic risks can only be addressed at the planning process. Management needs to ensure that they do not outsource core competencies. Knowledge management can be used to identify which processes should not be outsourced. Composite risks are concerned with the future of the business. Outsourcing may result in loss of knowledge or skill to perform a task. This can be mitigated through knowledge management where the organization keeps in touch with the supplier’s explicit and tacit knowledge (Benslimane, 2005).
Adelman, C. (2000). A Parallel Post-secondary Universe: The Certification System in Information Technology. Washington: U.S Department of Education.
Allen, T. (1994). Information Technology and the Corporation of the 1990s. New York: Oxford University Press.
Benslimane, Y. (2005). Investigating Search Costs and Coordination Costs in Electronic Markets: A Transaction Costs Economics Perspective, Electronic Markets, 15, (3):213-224.
Gilley, K. (2000). Making More by Doing Less: An Analysis of Outsourcing and its Effects on Firm Performance, Journal of Management, 26 (4): 763-790.
Kotler, P. (2006). Marketing Management. New York: Pearson Education.
O’Brien, J. (1999). Management Information Systems – Managing Information Technology in the Internetworked Enterprise. Boston: Irwin McGraw-Hill.