Business Process Re-engineering

Business process re-engineering is a business management strategy, originally pioneered in the early 1990s, focusing on
the analysis and design of workflows and business processes within an organization. BPR aimed to help organizations
fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs,
and become world-class competitors.[1] In the mid-1990s, as many as 60% of the Fortune 500 companies claimed to either
have initiated reengineering efforts, or to have plans to do so.
BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their
business processes.

Business Process Reengineering (BPR) is the practice of rethinking and redesigning the way work is done to better
support an organization's mission and reduce costs. Reengineering starts with a high-level assessment of the organization's
mission, strategic goals, and customer needs. The concept of BPR was first introduced in the late Michael Hammer's 1990
Harvard Business Review article and received increased attention a few years later, when Hammer and James Champy
published their best-selling book, Reengineering the Corporation. The authors promoted the idea that sometimes-radical
redesign and reorganization of an enterprise is necessary to lower costs and increase quality of service and that
information technology is the key enabler for that radical change.
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real work that produces the information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed, and build control into the process.
7. Capture information once and at the source.
Benchmarking
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best
practices from other companies. Dimensions typically measured are quality, time and cost. In the process of best practice
benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist,
and compares the results and processes of those studied (the "targets") to one's own results and processes. In this way, they
learn how well the targets perform and, more importantly, the business processes that explain why these firms are
successful.
Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of
measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is
then compared to others.

Types: - Benchmarking can be internal (comparing performance between different groups or teams within an
organization) or external (comparing performance with companies in a specific industry or across industries). Within these
broader categories, there are three specific types of benchmarking: 1) Process benchmarking, 2) Performance
benchmarking and 3) Strategic benchmarking. These can be further detailed as follows:

Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a
goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be
required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes
where outsourcing may be a consideration. Benchmarking is appropriate in nearly every case where process
redesign or improvement is to be undertaking so long as the cost of the study does not exceed the expected
benefit.
Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products
and services with those of target firms.
Strategic benchmarking - involves observing how others compete. This type is usually not industry specific,
meaning it is best to look at other industries.
Business Outsourcing

Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and
responsibilities of a specific business process to a third-party service provider.
The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources
have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency,
which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry
(specifically the move to more service-based rather than product-based contracts), companies who choose to outsource
their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances
the flexibility of an organization in different ways: Most services provided by BPO vendors are offered on a fee-forservice basis, using business models such as Remote In-Sourcing or similar software development and outsourcing
models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost
structure helps a company responding to changes in required capacity and does not require a company to invest in assets,
thereby making the company more flexible.
Another way in which BPO contributes to a companys flexibility is that a company is able to focus on its core
competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released
from performing non-core or administrative processes and can invest more time and energy in building the firms core
businesses. The key lies in knowing which of the main value drivers to focus on customer intimacy, product leadership,
or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge. A third
way in which BPO increases organizational flexibility is by increasing the speed of business processes. Supply chain
management with the effective use of supply chain partners and business process outsourcing increases the speed of
several business processes, such as the throughput in the case of a manufacturing company. Finally, flexibility is seen as a
stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business
bottlenecks.BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise
sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal
entrepreneurial phase to a more bureaucratic mode of operation.
Total Quality Management (TQM)
Total quality management (TQM) consists of organization-wide efforts to install and make permanent a climate in which
an organization continuously improves its ability to deliver high-quality products and services to customers. While there is
no widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques of
quality control.
Features: - There is no widespread agreement as to what TQM is and what actions it requires of organizations; however a
review of the original United States Navy effort gives a rough understanding of what is involved in TQM.

The key concepts in the TQM effort undertaken by the Navy in the 1980s include:
"Quality is defined by customers' requirements."
"Top management has direct responsibility for quality improvement."
"Increased quality comes from systematic analysis and improvement of work processes."
"Quality improvement is a continuous effort and conducted throughout the organization."
TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design,
engineering, and production, customer service, etc.) to focus on meeting customer needs and organizational
objectives.TQM views an organization as a collection of processes. It maintains that organizations must strive to
continuously improve these processes by incorporating the knowledge and experiences of workers. The simple objective
of TQM is Do the right things, right the first time, every time. TQM is infinitely variable and adaptable. Although
originally applied to manufacturing operations, and for a number of years only used in that area, TQM is now becoming
recognized as a generic management tool, just as applicable in service and public sector organizations. There are a number
of evolutionary strands, with different sectors creating their own versions from the common ancestor. TQM is the
foundation for activities, which include:

Commitment by senior management and all employees

Meeting customer requirements
Reducing development cycle times

Just in time/demand flow manufacturing

Improvement teams

Reducing product and service costs

Systems to facilitate improvement

Line management ownership

Employee involvement and empowerment

Recognition and celebration

Challenging quantified goals and benchmarking

Focus on processes / improvement plans

Specific incorporation in strategic planning

Benefits:

Strengthened competitive position

Adaptability to changing or emerging market conditions and to environmental and other government regulations
Higher productivity
Enhanced market image
Elimination of defects and waste
Reduced costs and better cost management
Higher profitability
Improved customer focus and satisfaction
Increased customer loyalty and retention
Increased job security
Improved employee morale
Enhanced shareholder and stakeholder value
Improved and innovative processes