Business Process Reengineering is the process of rethinking and resigning about the fundamental’s business process in the organizations.
Management of the entity considers Business Process Reengineering only for significant processes in the entity and to make sure its business could meet the following factors.
- Cost reduction
- Improved quality
- Enhance customer satisfaction
My personal word for Business process reengineering is radically and fundamentally change the way how processes are usually running to meet the above objective.
Let me clarify these four main objectives of Business process reengineering before we move to the influence of operational performance.
- The first one is a simplification. The objective of process reengineering is to make sure that process of doing an activity is as easy as possible. It is started by rethinking the basis of each of the activities and making sure people handling each process could easily understand the process. The process should not involve too many stages to get one activity done. The objective is the result of process complexity that happens in the day-to-day operation. Then, the reengineering will need to make sure the complexity does not happen again.
- Cost reduction stands second in rank, but it is of equal importance in terms of the benefit to the entity. The cost reduction here does not mean a reduction in quality. It still focuses on the quality that those processes are running and supporting. However, while performing redesign the process, we have to ensure that all of the waste of material or other kinds of resources needs to be minimizes. The long-running process and complexity of the process also incur a cost. Therefore, this one links directly with process simplification.
- Improved quality of the products or services to make sure that the company could complete its business in the market. This is quite important. The quality here sometimes not exactly the products or services that we sold to outside customers. But it is the quality of output that the process being considered to reengineer is offering.
- The last objective of Business Process re-engineering is to enhance customer satisfaction. Business Process Reengineering needs to make sure that all the Business Process Reengineering provides the benefit to customers. The customers rely on it because of the quality of products and quality of services. For example, the process is designed to make sure after-sales services are fast and reliable.
Now let move to the way how Business Process re-engineering would influence the operational performance of an entity.
Reengineering would influence the operation of the company by making two main outputs. Negative and Positive.
Well, positive or negative will base mainly on how the environment, processes, and leadership of project management are. It also affects by the gap between existing and new processes is.
In some organizations, people enjoy following the old fashion or old way of doing things. People are not fully aware of the new technology and they willing not to adopt the new things. Especially, when we introduce new things.
With such a situation, probably there is big resistance from those process holders. In this case, the project manager who is responsible to make change is not strong enough, the change will not succeed.
Then there will be a negative impact. The better way to make sure that the Business Process Reengineering is to require a project manager to have proper planning.
For example, the project plan schedule needs to be prepared. The budget for the project needs to be approved. The project manager also needs to get strong support from the key person and senior manager.
If the Business Process Reengineering is successful, the company will get many positive effects and appear the better result in the performance.
As mention in the objective above, the company’s cost will decrease as a result of removing the process that is not necessary. Staff who hold the process also feel being motivated because the process they are doing is important for the company.
One of the best benefits is the company will receive positive feedback from its customers because the change will make the process flexible with quality mine set.