Spectrum of Change

 Automation is the use of technology to perform tasks faster and more efficiently.
 Rationalization of procedures means simplifying processes by removing bottlenecks for
greater efficiency.
 Business Process Reengineering is the radical redesign of processes to cut costs and improve
quality.
 Paradigm Shift is a fundamental change in business and organizational strategy.

Business Process Reengineering (BPR) is the radical redesign of business processes to achieve
significant improvements in efficiency, cost, quality, and speed. It eliminates unnecessary steps and
integrates technology for better performance. Example: Ford automated its accounts payable process,
reducing staff by 75% and improving efficiency.

Key words

 Fundamental: Focus on why processes exist and how they can be improved.
 Radical: Reinvent business processes instead of making small improvements.
 Dramatic: Used when major change is needed for survival or growth.
 Business Process: A set of activities that transform inputs into valuable outputs for
customers.

BPR is NOT:

1. Automation: This means using technology to perform tasks automatically instead of

manually. For example, a company using software to process invoices instead of
employees manually entering data.
2. Downsizing: This involves cutting costs by reducing the number of employees or closing
departments. For example, a retail company shutting down underperforming stores to
save money.
3. Outsourcing: This is when a company hires another firm to handle certain tasks instead
of doing them in-house. For example, a business hiring an IT firm to manage its customer
support instead of maintaining an internal team.
4. Continuous Improvement: This focuses on small, gradual improvements rather than
complete changes. For example, a car manufacturer improving fuel efficiency in each
new model rather than redesigning the entire production process.

Similarities between Reengineering & Continuous Improvement

1. Both Focus on Processes: Both aim to improve business processes for better efficiency.
2. Use Rigorous Performance Measurement: Both require strict evaluation to track progress.
3. Lead to Significant Organizational Change: Both impact company structure and operations.
4. Require Behavioral Change: Employees need to adapt to new ways of working.
5. Demand Substantial Time Investment: Both take time to implement effectively

Differences between Reengineering & Continuous Improvement

 1. Level of Change: Reengineering is radical, while continuous improvement is incremental.
2. Starting Point: Reengineering starts from scratch, while continuous improvement modifies
existing processes.
3. Participation: Reengineering is led by top management, while continuous improvement involves
employees at all levels.
4. Scope: Reengineering impacts multiple departments, while continuous improvement focuses on
specific functions.
5. Risk: Reengineering carries high risk, whereas continuous improvement is moderately risky.
6. Primary Enabler: Reengineering relies on technology, while continuous improvement depends
on statistical control.
7. Type of Change: Reengineering changes both culture and structure, while continuous
improvement focuses on culture.

Process

A process is a sequence of work activities arranged in a specific order across time and space,
with a clear start, end, inputs, and outputs to achieve a goal.

Business Process

A business process is a set of related tasks that use a company's resources to deliver value to
customers and support organizational goals.

Why Reengineer?

 Customers: They have higher expectations, increasing demands, and evolving needs.
 Competition: Businesses face both local and global competition, requiring innovation to stay
ahead.
 Change – Technology and customer preferences are evolving rapidly

Why Business Process Reengineering (BPR)?

 Integration – Combines people, technology, and organizational culture.

 Adaptation – Helps businesses respond to fast-changing technology and customer needs.
 Improvement – Aims for significant performance gains.

Key Characteristics of Reengineering

 Systems Philosophy: Views the business as a whole system rather than isolated parts.
 Global Perspective on Business Processes: Looks at the entire process, not just individual tasks.
 Radical Improvement: Aims for major changes rather than small improvements.
 Integrated Change: Combines technology, people, and processes for transformation.
 People-Centered: Focuses on employees and their role in business success.
 Focus on End-Customers: Ensures processes are designed to meet customer needs.
 Process-Based: Prioritizes workflows and efficiency over traditional structures.
Finding a Compelling Need for BPR

 Burning Platform – Companies often change when facing major threats, like Xerox losing market
share or Ford struggling with quality issues.
 Proactive Change – Instead of waiting for a crisis, leaders should innovate early, as Jack Welch
advised: "Change before you have to."
 Benchmarking – Comparing performance with top organizations helps identify improvement
areas even during good times.

Why Organizations Don’t Reengineer?

1. Complacency – Companies may feel comfortable with their current success and resist
change.
Example: A profitable retail chain ignores e-commerce, believing physical stores are
enough.
2. Political Resistance – Employees or managers fear losing control or power, leading to
resistance.
Example: A department head blocks automation to protect jobs under their supervision.
3. New Developments – Businesses may focus on new trends instead of fundamental
process changes.
Example: A company invests in social media marketing but ignores supply chain
inefficiencies.
4. Fear of Unknown and Failure – Fear of change or risk of failure discourages
transformation.
Example: A bank avoids digital banking due to concerns about cybersecurity threats.

Performance in BPR

Business Process Reengineering (BPR) aims to improve:

1. Cost – Reducing operational expenses by eliminating inefficiencies.

2. Quality – Enhancing product or service standards to meet customer expectations.
3. Service – Providing better customer experiences and satisfaction.
4. Speed – Accelerating processes to improve response and delivery times

THE FOUR WAVES OF BPM

1. First Wave: Scientific Management (1900s)

This approach focused on making work more efficient by breaking tasks into small, simple steps.
It aimed to increase productivity by standardizing processes and assigning workers to specific
tasks. This method reduced errors and saved time.

Example:
Henry Ford introduced the assembly line in car manufacturing. Each worker focused on one task,
like attaching wheels, which made production faster and cheaper.
 2. Second Wave: Automation (1980s)

This phase introduced computers and technology to handle repetitive tasks, reducing human
effort and mistakes. Automation made processes faster, more accurate, and cost-effective.

Example:
ATMs changed banking by allowing people to withdraw money without needing a teller, making
transactions quicker and more convenient.

Case Study:
Coca-Cola automated its bottling process using robots, improving speed and accuracy while
reducing manual labor.

3. Third Wave: Business Process Reengineering (1990s)

This wave focused on completely redesigning business processes to achieve major improvements
in efficiency, cost, and service. Instead of making small changes, companies restructured
workflows from scratch.

Example:
Dell revolutionized its supply chain by letting customers customize orders online, reducing wait
times and inventory costs.

4. Fourth Wave: Agile BPM (2000s - Present)

This wave focuses on using modern technologies like AI, IoT, and cloud computing to make
business processes more flexible and responsive. Companies continuously improve processes
based on real-time data and customer feedback.

Example:
Amazon’s recommendation system analyzes customer behavior in real time to personalize
shopping experiences and optimize inventory management.

Importance of BPM in Organizations

1. Operational Efficiency – BPM eliminates unnecessary steps, automates tasks, and

improves workflows.
Example: Toyota uses Lean principles to reduce waste and maintain high quality.
2. Improved Customer Experience – BPM ensures processes focus on customer needs,
increasing satisfaction.
Example: Starbucks optimizes barista workflows to provide consistent service.
3. Enhanced Agility – BPM helps businesses quickly adapt to market changes.
Example: Netflix refines its recommendation algorithms based on user behavior.
4. Cost Savings – By removing inefficiencies, BPM reduces operational costs.
BPM PERSPECTIVE

Vertical Perspective in BPM

The vertical perspective focuses on improving processes within a single department or unit,
ensuring efficiency and accountability within that specific area.

Key Characteristics:

 Department-Centric – Works within a single department like HR or Finance.

 Hierarchical – Follows the organization's reporting structure.
 Specialization – Focuses on expertise within a function.
 Control-Oriented – Ensures compliance and governance.

Example:

A hospital improving its patient admission process within the administration department to
reduce waiting times.

Practical Example (Manufacturing Company)

In a manufacturing company, the production department follows a vertical process to assemble

products efficiently. Steps include:

 Receiving raw materials

 Assembling components
 Conducting quality checks
 Packaging finished goods
Each step is managed within the production department without involving sales or logistics.

Industrial Example (Automotive Industry)

In the automotive industry, the engineering department follows a vertical process to design a new
car model. Steps include:

 Conceptualizing the design

 Creating CAD models
 Testing prototypes
 Finalizing the design for production
The engineering team works independently, focusing on specialized tasks and reporting progress
to management.

Horizontal Perspective in BPM

The horizontal perspective looks at processes that flow across multiple departments to ensure
smooth collaboration and customer satisfaction.
Practical Example (Manufacturing Company)

In a manufacturing company, the order-to-delivery process involves:

 Sales: Receives customer orders.

 Production: Manufactures the product.
 Logistics: Ships the product.
 Finance: Invoices the customer.
This ensures timely and efficient order fulfillment.

Industrial Example (Healthcare Industry)

The patient discharge process in hospitals involves:

 Doctors: Approve discharge.

 Nurses: Prepare the patient and provide instructions.
 Billing: Generates the final bill.
 Pharmacy: Provides medication.
 Admin Staff: Schedules follow-ups.
This coordination ensures a smooth patient transition from hospital to home.

Comparison of Vertical vs. Horizontal Perspectives

Aspect Vertical Perspective Horizontal Perspective

Focus Department-specific tasks End-to-end processes across departments
Narrow (within a single
Scope Broad (across multiple departments)
department)
Customer satisfaction & overall process
Goal Efficiency within the department
efficiency
Minimal (limited to the
Collaboration High (cross-functional teamwork required)
department)
Example Production line in manufacturing Order-to-delivery process