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Role of Information Technology in Business Process Reengineering
Business Process Reengineering (BPR) is the process of comprehensively revamping the existing business process with a view to create a dramatic return of investment by reducing cost and improving quality. Changes in customer preferences, tight competition in the market with superior goods and services, advancement of technology decreasing profits and higher operational costs all pave way to BPR.
The primary aim of reengineering process is to boost the performance of a business to its optimum level possible. BPR initiates a quantum jump not only to the organization, but also to the external parties like suppliers and customers. Attaining customer satisfaction with high profitability at a faster pace, with reduces costs is the motto behind implementing BPR. Technological advancement is ought to have an impending effect on customer preferences. Information systems and technology provide better understanding of information of business operations and helps to process it efficiently. The purpose and role of IT in BPR is discussed in this tutorial.
Information Technology (IT)
Information Systems help to connect technology and people. Information Technology, a subset of Information systems, helps to analyze, plan, evaluate and manage the data within an information system. On a broader note, IT refers to the entire electronic medium that helps networking, communication and aids processing information. IT helps to tackle business operations by combining process and people more productively. Information technology enables extending processes beyond operational and functional limits and encourages process-driven entities. BPR utilizes information technology as an enabler for redesigning and revamping its business process to create substantial growth. It is capable of enhancing information access and productively coordinates across functional units.
Role of IT in BPR
Information technology helps to provide consistent on-demand support to the organization as a whole to quickly respond to unpredictable challenges in the market. IT has its role even before starting the redesign as an enabler, designing phase as a facilitator, and finally implementing BPR in the organization. Thus the prime role of IT in process reengineering can be clubbed to main three phases.
Role of IT starts prior to the process design. As BPR is all about bring in a radical change to the overall business entity, it is important to have a thorough understanding of customer expectations, market trend, sector indices and competitive directions. Information technology is employed to accurate information on these parameters.
Infrastructure and information management – IT enables the use of latest technology to build a strategic plan and vision to upgrade the process prior to its design.
Promote process efficiency – IT is capable to control the geographically scattered units as a single hub by utilizing communication and linked networks. Thus it removes all geographical barriers facilitating ease of decision making at a faster pace.
Identification of processes that needs improvement – The correct isolation of the problem leads to the apt solution. Identifying the root cause of a problem is an exhaustive and intricate task that IT could tackle effortlessly.
Predicting and anticipating required information – IT is involved to predict the future requirements based on trends, gaining insights on customer choices and help to design the process accordingly.
Establishing long term goals regarding cost, revenue and profits.
Clearly defining the boundaries of BPR and scope of its operations.
Information Technology exercises its role as a facilitator in this second phase of process redesign. Technical and social design is taken care of here. The gathered data is analyzed and options redefined, logically re-link process and technology applied after aligning the control points. The social aspect, human resources are taken care of, that includes clearly defining tasks, and skills required resource requirements and cautious scrutiny of finalizing incentives. Other vital roles of IT in this phase are:
Collating huge amount of information in to the business process.
Complex analytical methods can be brought under the IT umbrella by introducing Project Management tools and electronic medium.
IT tools can automate the mapping and flow charting the on-going system of operations to pin down enablers for process redesign.
Discard long and vertical information flows to reduce decision making time using IT enabled networks.
Reduce and replace man hours with automated systems where ever possible.
Formulate accurate performance measurement indicators.
Illustrate objectives and precise goals based on job role.
Building database based on the employees input customer requirements. It will help to track satisfaction rates, scrutinize customer grievances and collect employee’s opinion to enhance customer satisfaction.
IT also helps to facilitate alternative business processes where management could think of multiple goals in redesigning. Advanced IT systems can technically forecast current and future scope of resources and industry transitions.
This is the important phase where the reengineering efforts are in highest magnitude. All planning, operations and technology are driven towards the organizational objectives at this stage. Newly revamped approach and process are put to test here, results are monitored and rigorous training is initiated to employees. Breaking departmental barriers with a re-check on business goals upholding the vision is taken forward. Information Technology has a pivotal role to play in rolling out this stage.
Creating computerised mechanism for capturing feedback.
Critically analysing the new process using project management and process analysis tools.
Upgradation of technology of the redesigned functional units.
Equip with process clean-up and control measures in case of failure of a redesigned process.
Keep track and ensure live results of BPR implantation with management and units involved. Prompt communication helps real time information transfer of the changed process among users and implementers.
Finally evaluate and compare the investment done on BPR with the prospective return on investment.
The ultimate success of any reengineering process requires a business to focus on key processes that are linked to cost reduction, quality, on-time supply and customer satisfaction. A simple automation or improvement of the existing process might not yield promising results.
Benefits of IT in BPR
In a nutshell, the advantages of information technology in process reengineering are to
Drastically decrease cost
Accomplish precision in business process
Facilitate simultaneous inter-departmental coordination and communication
Effective integration of team work
Overhaul the entire system to be considerably effective and efficient
Ensure a user friendly system where tasks are carried out productively
IT plays a significant role in the success of reengineering. As BPR has gained importance to develop inter-departmental communication, alliances and cross company relationships, Information technology supports and aids such reengineering efforts. Web services, database and repositories have helped with capturing customer preferences, automation of repeated processes and marketing analytics.
IT enhances the product development by supplying state-of-the-art development processes, e-commerce and control of intellectual property. Digital content aids, knowledge management and e-learning are also the benefits of IT. Diminishing costs and dramatic progress in the field of information technology are helping organizations to utilize IT for their business optimization.
To conclude, information technology helps to meet the objectives of process reengineering by linking and providing required information across departments, upgrading process performance and by evaluating, optimizing and monitoring its outcome.
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