In every organization, profit maximization and cost minimization is the contribution of all the organization’s departments/divisions. This is only achieved if there is maximum cooperation of all the divisional heads involved.
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The business process department and the reengineering department need to cooperate and work out various projects of an organization effectively. The two departments depend on each other for the success of the firm in the business environment.
While the business process department is responsible for development of a given product, the reengineering department is responsible for providing the best technology that can develop the required product.
As noted by McKeen and Smith (2009), designing of a new product that fits into the needs of customers is not enough as there is need for the redesigning and development of the product using the best techniques.
The reengineering department is responsible for innovation and establishment of a competitive advantage in technology. The technology should be the best in the market for attainment of a completive advantage.
The establishment of the business processes requires focus on a given market by the firm using the generic strategy as put forward by Porter. In an organization, one can design a good chocolate product for young children under the age of ten years.
The chocolate is comprised of various components that meet the things that children seek in chocolate such as enough sugar, flavor, color and taste among others (Gunasekaran & Kobu, 2002). These are the ingredients that the business process can come up with and deliver them to the reengineering department.
The reengineering department is responsible for establishing the best technology that can combine the ingredients in the best manner possible to produce the highest quality chocolate for children aged below ten years (McKeen & Smith, 2009).
The decision on the best technology would be done by the reengineering department. In addition, the two departments must work together with the other departments such as the marketing department to come up with the best marketing strategy for the firm.
This involves establishment of the best adverts that can increase awareness of the product to the targeted group. For instance, the broadcast media is the best type of media to advertise the new product since it has the visual that is significant for the children.
The ability of the marketing department to come up with the right feedback concerning the chocolate is significant in the reengineering process since an organization can only reengineer what is good for the customer (Pearlson & Saunders, 2010).
Business Process Reengineering
The modern business environment is characterized by change, increased competition and increasing significance of customers. These factors are offering firms with many challenges to meet their objectives and they have no choice but to embrace new technologies that can enable them meet their objectives.
According to McKeen and Smith (2009), business process reengineering is one of the solutions to the issues that many companies are currently facing.
Business process reengineering is a fundamental rethinking and redesigning the process of an organization with the aim of achieving dramatic improvement in critical measures of performance for firms.
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The processes require that firms go back to the roots of processing their products and reexamine new ways of making the product better while maintaining the quality.
There is no need for small improvements. An organization needs to carry out total reinvention to come up with a new quality product. The major focus for reengineering should be the needs of the customers.
An organization can only be as effective as its processes and therefore new technologies should always be incorporated in the manufacturing process.
Successful Application of Business Process Reengineering at Wal-Mart
Wal-Mart is a dominant retailer in the U.S. as it has many of its stores located in many locations in the country.
The retailer applied business process reengineering in order to improve on its competitive advantage, meet the needs of its customers while at the same time meet its organizational objectives of maximizing profit through cost minimization (Muthu, et al. 1999). The firm implemented a new technology that had just been unveiled.
The electronic commerce was implemented by Wal-Mart in the 1980s through a half a billion dollar project that saw the activities of the organization automated through computers and satellite communication network.
Other new technologies acquired by the organization were the bar code systems, scanners and equipment that inked the point of sale terminal to the distribution centers and the headquarters of the organization (McKeen & Smith, 2009).
The acquisition of this new system changed the manner in which Wal-Mart conducted its business as the firm reengineered the entire supply chain. According to Lucas (2005), the sales of the company had exploded and there was need for a new system that could manage the large number of customers.
The new technologies improved the timing of the customers since the services offered were fast. High service levels were maintained with increased sales being realized.
The cost of inventory was reduced drastically by 75%. BPR as was applied in Wal-Mart empowered the firm to authorize its individual stores to make orders directly from overseas suppliers thereby reducing the restocking time from six weeks to 36 hours.
The stores of the firm were well stocked since the firm was able to track all sales through point of sale system. In addition, process reengineering led to maintenance of tight inventories and low prices (Chiplunkar, Chattopadhyay & Deshmukh, 2003).
From the perspective of the modern business, it is important that an organization takes stock of its capabilities and reinvents its processes using advanced technology.
These reengineering processes have benefits not only to the firm, but to its management because the firm would be able to maintain its competitive edge hence maintain its dominant position in the industry.
However, maximization of the benefits of BPR requires that the firm constantly reviews its processes in relation to advanced technologies in the market that can improve it further. In addition, this could be checked in line with meeting the customers’ needs (Kalakota & Whinston, 1997).
Poor application of BPR
A UK based firm employed BPR in its processes with the aim of improving customer relationship management. The management of the firm was of the idea that it should develop strategies that can improve management of its customers through adoption of new information technologies.
With the goals having been set, the project began with the firm redesigning the entire customer management system including the customer complaints handling section. The successful reengineering of the process was completed, tested and handed to the firm. However, complaints emerged of compatibility of the system.
It was discovered that the failure of the process was because the system reengineering process had been done in isolation with the information technology in the firm and the IT personnel had less influence on the overall reengineering work sine it had been designed by the top management.
The problem of miscommunication emerged and it cost the firm a new system (Weerakkody & Curre, 2003).
Chiplunkar, C., Chattopadhyay,R. & Deshmukh, S. (2003). Application of principles of event related open systems to business process reengineering. Computers and Industrial Engineering, 45(3), 347-374.
Gunasekaran, A. & Kobu, B. (2002). Modeling and analysis of business process reengineering. International Journal of Production Research, 40(11), 2521-2546.
Kalakota, R. & Whinston, A. (1997). Electronic Commerce: A Manager’s Guide. London: Addison-Wesley Professional.
Lucas, H. (2005). Information Technology: Strategic decision making for managers. Hoboken, NJ: John Wiley & Sons.
McKeen, J. & Smith, H. (2009). IT Strategy in action. Upper Saddle River, NJ: Pearson Prentice Hall.
Muthu, S. et al. (1999). Business process reengineering: a consolidated Methodology. Web.
Pearlson, K. & Saunders, C. (2010). Managing and using information systems. (4 ed.). Hoboken, NJ: John Wiley & Sons.
Weerakkody, V. & Curre, W. (2003). Integrating Business Process Reengineering with Information Systems Development: Issues & Implications. Web.