Business Redesign 1728
Business Process Redesign (BPR) or Reengineering is “the
fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance,
such as cost, quality, service, and speed” (Hammer and Champy,
Reengineering). Since the BPR idea has surfaced it has been under constant
ridicule by the popular press. They say it takes far too long, creates
management headaches, fails 70% of the time, and it’s only for big
companies with big checkbooks (Hydrel…). However, I feel that with the
right plan, the right people, and total commitment from those involved, BPR
or Reengineering can work for any company.
The Hydrel Experience
A good example of this is Hydrel, a manufacturer of in-ground and
underwater lighting equipment. They were about to begin selling their
products in the international market, and were afraid their current systems
could handle the rapid increase in volume. So the company president, Craig
Jennings, hired the D. Appleton Company (DACOM) to help reengineer the
company’s plans to handle its growth rate. After DACOM reviewed Hydrel’s
functional areas and the desires of the top-level management, they concluded
that the order management and inventory control process had to be
redesigned to meet the demands.
Then they comprised three teams: process, quality, and information.
But before the three teams could work separately, they had to go through a
process to determine if the team members were on the right team, and if they
could work together. So each of the three teams reviewed employee
personalities using the Pearson Personality Inventory (Hydrel…). After using
the PPI system they found that all the teams were compatible, and began
working on the job at hand.
The process team attacked the reengineering of the “Manage Customer
Order” process which included all contact with prospects, customers, and
sales agents the moment a question came up. Then they invited customers
and suppliers to air their own issues and ideas about their company. All of
them had something to say about the company and were impressed with the
reengineering effort. The Hydrel process team concluded its redesign work
with a delivery process that removes 37% of the order management activities
(Hydrel…). And also designed a new computer system to carry out the new
process. The new computer system will also be used by the quality team to
update their new metrics system. The quality team developed a completely
new system for the reengineering process. This new metrics system
continually updates them on changes in the market that deal with quality.
This is important so they can deal with the changes right away and stay
competitive. And finally the information team came in to wrap up the whole
process and implement the new computer system. They design a system that
fit the current demands but is able to grow and expand a the same rate as the
Due to total commitment from the right people, using the right
methods Hydrel has successfully reengineered the process of order
management and positioned the company for dramatic profitable growth.
And they have proved my statement that reengineering can work for every
company no matter what their size.
The Texas Commerce Bank Experience
In early 1994, Texas Commerce Bank (TCB) launched a reengineering
process called Process Improvement, which included every organizational
process and all 9,000 employees (Betting…). TCB’s goals for their program
were: remove all employee frustrations associated with policies, processes,
services, or products; change processes to improve quality, deliver improved
service to customers, and eliminate unnecessary expenses (Betting…).
However, TBC took a different approach towards their business process
redesign. They decided to approach this as a whole inorder to get maximum
involvement from their employees. TBC had several reasons for this one
being; there were already strong relationships present between bank
employees and they didn’t want those relationships damaged.
However, this idea didn’t last long due to the overwhelming number of
replies from the “Ideas To Bank On,” which was a suggestion box. And
TCB was forced to create about 180 process teams. Which included senior
managers,process managers, team leaders, and about 1,800 employees
(Betting…). This move, however, caused a bit of turmoil in the whole
process due to he fact that, many employees weren’t use to works in groups.
And eventually led to the redesign phase, one that went to drastic measures
and wiped the slate clean.
This time, however, the bank knew what it had to do. So this time
TCB moved quickly through the process, and it led to quick results. They
began by redesigning the bank’s lines, question certain products, eliminated
processes, and apply newer technologies. And finally a blue print emerged.
Which included narrative descriptions of processes, new flowcharts, all
projects cost/benefit analyses, and the implementation of strategies. The
benefits of this process were significant: 16,000 ideas, 1005 projects, 1,100
positions to be terminated, and $43M in reduced expenses (Betting…).
So now that a new plan is in place TCB has taken the appropriate steps
to keep them in working order. The 1,005 recommendations have been
assigned to teams within the line of business. Formal project plans for each
team are developed and gathered weekly and are loaded into a database for
tracking by other interdependencies (Betting…) This database is also
available the employees to access if they want to check on an idea or if they
want to suggest an idea. This database is also a great way for managers and
employees to keep intouch on all aspects of the business, both big and small.
Although this process didn’t run as smooth the Hydrel experience it
still proves that reengineering or BPR can work for a company. Also I think
the TCB experience proved that, there are different ways to go about
reengineering a company but the bottom line is, with total commitment it can
work for all companies.
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