The process for improving business

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THE SCALE of the recession in recent years, coupled with increasingly intense competition, has produced the need in most organisations for radical improvements in performance. Few now question the need to become significantly more effective, efficient and adaptable, but many are asking how. A popular answer is Business Process Re-engineering.

BPR has one goal, one focus and one requirement. The goal is significant improvements in performance. The focus is on processes. The requirement, commitment from the top team.

Unfortunately, some are still peddling an alternative message - that BPR must involve radical change, its focus is on strategy and its requirement is information technology (IT). These alternatives contain enough truth to be credible, but can cause initiatives to be misdirected.

BPR's goal is significant performance improvement, not radical change. Proponents of the 'BPR is about radical, organisation-wide, change' camp are usually found in places without direct responsibility for the results, often in academia, consultancies or support functions with everything to gain and little to lose.

Those who stay around to see the project through are rightly more cautious. While they continue to talk about a fundamental re-think as their sales pitch, their implementation advice hinges on manageable steps. Change can bring improvement but it does not guarantee it and there is a limit to the amount of change with which firms can cope.

Most succeed through incremental levels of change across the entire company with more sweeping changes made to carefully targeted areas. The key is that change should not be seen as an end in itself.

Why am I making such a fuss? First, I have seen the change agenda take over as the main focus of the initiative all too often. The result can be lots of disruption with little performance improvement to show for it.

Second, many organisations see stability as the key to maintaining the confidence of customers and shareholders. They still wish to make some improvements, however, and should not think that BPR can only be used in a context of high-risk, company-wide, radical change.

One reason why BPR can yield gains through smaller changes, at least initially, is its focus on processes. Strategy outlines the direction for the future, but it is the concentration on processes that separates BPR from other philosophies.

It questions the established organisation based around specialised functions. While functions may have great strengths, they may become too strong and a balance is needed.

Many organisations lost understanding and control of processes decades ago. Definitions of processes often include something to the effect that they add value to inputs.

The whole point of BPR is that too often these processes don't actually add any value, they merely add cost. They should be like high- speed expressways offering safe and rapid transit, end to end. Unfortunately, many corporate processes are long, winding and dangerous. The routes are ill-signed, distances unmeasured and 'roads' are of poor quality causing damage to the material and information passing along them.

Because of this neglect, processes offer huge potential for improvement.

To realise that potential, firms must be clear about the prerequisite for success in BPR - commitment from the top, not IT.

Even if the required structural changes are small, the changes needed to 'mindsets' are a big shift. Without commitment from the top, a BPR effort will fail to deliver lasting, step improvements.

This lesson has been learnt in other philosophies such as Total Quality Management and should not be forgotten in BPR.

Unfortunately, many top teams, unless faced with crisis, choose not to devote enough time to BPR, often preferring to delegate to the IT department. Systems people, as trained analysts often with a cross-functional view of an organisation, do have certain skills which qualify them for such a role.

They do not, however, have responsibility for the business processes and tend to focus on building computer systems. Those who say IT is a requirement of BPR have missed the point.

BPR originated out of the disappointments resulting from past IT investments. IT may be an enabler of new ways of working but it is not a requirement. People who believe otherwise are technologists or have something to sell.

Companies thinking about re- engineering their processes should make sure they keep the goal of improvement paramount, focus on the processes they use as a means to achieving this and don't start unless the most senior levels of management are going to drive the programme through.

Philip Rowland is a visiting fellow at Cranfield School of Management.

(Photograph omitted)