Week 5 – Basics of BPR(1)

Source / Reference:

1.     H. Davenport, L. Prusak, H. James, "Reengineering revisited" (2003)

2.     V. Grover, K. Malhotra, "Business process reginnering: A tutorial on the concept, evoluation, method, technology and application" (1997)

3.    Nolan, Norton & Co, BPR Criticality Framework

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Response:

This lecture we have learnt the concept of BPR which I will give a brief summary for it. And then I will go on to talk about the reading and raise a reflecting question - when should do a reengineering for a business firm.

At the end, I try to find out the solution by providing some reference to explain the detail for it.

There are 3 basic concepts we have learnt in week5. I would like to illustrate them in a table.

Short summary of week 5 lecture

Business	Outside – in perspective: Run business through the eyes of the customer
Process	Delivering outcome to customer (Typically, they’re cross functional)
Reengineering	Aim for quantum improvements, maximizing the value adding

Lessons learned from reengineering

From the paper I read, Reengineering is a buzzword in 1990s. Being touted the success case of reengineering, like Ford and Mutual Benefit Life, many firms followed suit and that caused a “wagon effect” at that time. However, most of them are not success, according to the article, about 70% failed.

This makes me dwelling on when should do a reengineering for a business firm, what’s criteria should consider before we try to do a reengineering.

It is risky if we haven’t consider in all-rounded factors before we launch the reengineering project, as it is talking about millions dollar investment. In fact, many researches had been done to determine whether a business should do a reengineering.

Figure1

BRP is always a trade-off between the change and the cost. Firms have to fully understand that it is not guaranteed that the business will be success after reengineering, and even the change caused by reengineering, the company may bear the risk of it. Therefore, we should try to understand the situation where the firm should do the redesign job. In figure 1, the framework can be applied to analyze the firms’ situation to decide whether it should start BPR.

As you can see in the figure1,

Horizontal – how well the firm ready for the BPR project.

Vertical – how important for the firm to implement BPR project.

Quadrant	Strategy	Implication
1	Survival	Essential to improve the business performance by launching BPR in order to survival
2	Launch	Moderate risk of BPR, suitable to improve business performance by BPR
3	Reconsider	Business performance is stable, BPR is not necessary
4	Advantages	No urgency for BPR, but implementing BPR would gain advantages.

Figure 2: Four Quadrant explanation

Zone	Quadrants	Implication
Critical	1,2	Urgent for BPR
Managed	3,4	Less urgency for BPR
Risk	1,3	Should get focus on preparation and managing risk
Strike	2,4	Strategic advantages gained if BPR launched

Figure 3: For Zone explanation

By using BPR Criticality Framework, the necessity of BPR for a firm can be analyzed.

In conclusion, like any projects, BPR has its advantages and disadvantages. Firms should have to consider all the benefits and risks before launching BPR. As it involves huge amounts of money for investment and many other factors have been involved, it leads the complexity and many hidden risks to launch the BPR. That’s why so many firms had been fail in BPR. Using the BPR Criticality Framework can make it easy to understand the situation that the firms should implement BPR or not.