Many processes in business today are sophisticated and complex. Activities such as loan origination and fulfillment, claim dispute resolution, and product delivery are just a few of the hundreds of processes that can require action from multiple departments and span days, or even months. This challenge is where business process management (BPM) comes into play. BPM is the definition, design, integration, automation, monitoring, and management of business processes. Organizations across the globe are using BPM tools to coordinate work between human resources and systems services with the ultimate goal of improving organizational efficiency, responsiveness, and reliability. Companies embracing BPM have realized both immediate and long-term ROI. In fact, according to CIO magazine, many BPM customers report an ROI between 200 and 300 percent. Quite simply, BPM is helping companies meet today’s business challenges, lower operational costs, and streamline the processes they rely on to run their business.
Customer satisfaction has increasingly become the cardinal principle governing any successful business. In some cases, marketing campaigns have been reformulated and new slogans invented to take advantage of the impact of advertising on customers. Despite the new emphasis on customer satisfaction by companies, there has been a high incidence of complaints, anger, rage and acute disappointment over products. One of the reasons for this lies in the fact that old ways and processes have become severely inadequate and that the mere realignment of old values (old wine in new bottle) is no longer acceptable. In many cases, the present system can no longer be fixed and incremental improvements are not sufficient. What is needed is the reengineering of the entire system.
Business Process Reengineering
“Business Process Reengineering” (BPR in short) is also known as “Process Reengineering” or simply “Reengineering”. According to Michael Hammer Reengineering has been defined as “the fundamental rethinking and radical design of business processes to achieve dramatic or break-through improvement in critical contemporary measures of performance such as cost, quality, service and speed”. Reengineering does not strive to revamp the existing process to achieve quantum leaps in performance and to achieve higher levels of customer satisfaction. Reengineering entails the following seven rules or principles:
1. Organize around outcomes, not tasks.
2. Have those who use the output of the process perform the process
3. Merge information processing work into the real work that produces the information.
4. Treat geographically dispersed resource as though they work centralized.
5. Link parallel activities instead of integrating their results.
6. Put the decision point where the work is performed and build control into the process.
7. Capture information once at the source.
This key informant study of a cross industry sample of manufacturing companies in the US has developed and validated the construct of business process orientation (BPO) within an organization and created a usable instrument for diagnostic measurement of this construct. This study has also shown, at least in this sample, that the hypothesized outcomes of BPO within an organization appear to be valid. BPO has been shown to reduce inter-functional conflict and increase interdepartmental connectedness, both of which impact long and short term performance (EC and OP1). The reduction of conflict and increase in connectedness would also help create the "team" environment that has been a focus of so many management trends such as TQM.
In this study, only subjective relationships are examined using a self-evaluating instrument. A relationship between BPO and objective firm performance, such as long term ROI, should be tested. Also, testing of the BPO instrument within different business sectors (financial services, IT services, health care, etc.) would help determine if BPO matters more in some sectors than in others.