Business Process Reengineering

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Business Process Reengineering Analysis and Recommendations
By Maureen Weicher William W. Chu Wan Ching Lin Van Le Dominic Yu Thanks to Dr. Samuel Ryan of Baruch College, City University of New York © Copyright December, 1995. This paper is was written by a group of MBA and MS students at Baruch College. May be freely quoted as long as credit is given. Please send any questions or comments to Maureen Weicher ( Originally posted on 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Introduction Old Wine in New Bottles? Is BPR a Quick Fix? The Price of Experience The Role of the Leader and Manager Reengineering the Human Resource Human Reengineering Case Study: The Conquering Power of the Small BPR Places the Customer at the Center by Breaking Down Organizational Barriers Is Information Technology an Enabler or a Bottleneck? Alternatives to Reengineering Reengineering Recommendations Bibliography

Introduction The "jumping off" point for this paper is Reengineering the Corporation , by Michael Hammer and James Champy. The paper goes on to review the literature on BPR. It explores the principles and assumptions behind reengineering, looks for common factors behind its successes or failures, examines case studies, and presents alternatives to "classical" reengineering theory. The paper pays particular attention to the role of information technology in BPR. In conclusion, the paper offers some specific recommendations regarding reengineering.

Old Wine in New Bottles

The concept of reengineering traces its origins back to management theories developed as early as the nineteenth century. The purpose of reengineering is to "make all your processes the best-in-class." Frederick Taylor suggested in the 1880's that managers use process reengineering methods to discover the best processes for performing work, and that these processes be reengineered to optimize productivity. BPR echoes the classical belief that there is one best way to conduct tasks. In Taylor's time, technology did not allow large companies to design processes in a cross- functional or cross-departmental manner. Specialization was the state-of-theart method to improve efficiency given the technology of the time. [17] In the early 1900's, Henri Fayol originated the concept of reengineering: To conduct the undertaking toward its objectives by seeking to derive optimum advantage from all available resources. [17] Although the technological resources of our era have changed, the concept still holds. About the same time, another business engineer, Lyndall Urwick stated "It is not enough to hold people accountable for certain activities, it is also essential to delegate to them the necessary authority to discharge that responsibility." [17] This admonition foreshadows the idea of worker empowerment which is central to reengineering. Although Hammer and Champy are eager to declare that classical organization theory is obsolete, classical ideas such as division of labor have had an enduring power and applicability that reengineering has so far failed to demonstrate. BPR does not appear to qualify as a scientific theory, because, among other things, it is not duplicate and it has limited scope. The applicability of classical management theories, such as division of labor, were widely duplicable and portable. These ideas stimulated increases in productivity, output, and income that led to the creation of the middle class. If BPR is not a theory, but a technique, Hammer and Champy are surprisingly vague about the details. This paper attempts to fill in the blanks. Despite their vagueness, Hammer and Champy are clear about who to blame when reengineering attempts fail; it is the fault of the individual company. To the steering committee, this sounds like a variation of blaming the victim. Cyert and March, among others, point out that conflict is often a driving force in organizational behavior. BPR claims to stress teamwork, yet paradoxically,...