Why do we hear about companies taking initiatives for Business Process Reengineering after being so many years in business successfully?
Lot of companies have grown from being a small start-up, offering few niche services to big enterprises, offering a wide a set of services and solutions. Companies have grown from time to time by expanding/adding their services to meet the changing customer needs and targeting new market space. This leads to adding new processes to support these services. Any new process added will result in addition of man power, use of new technology and integration with other process. Over a period of time some of these old process become stale or less productive, they no more make sense from business perspective. Also, need to improve some of the existing process to achieve better performance results in focusing on Business Performance Reengineering.
Let’s talk about a simple example, few years back telephone was one the biggest source of communication after mail services. During that time a telecomm company used offer services for local and national calling with different plans and rates for each of them. A local (Process A) telephone call is much cheaper compared to a national (Process B) call. They had a defined process around these two business services with skilled people and technology for each of these services. With time passing by customer were introduced to Mobile phones and Internet. Growing competition, new technology and changing customer interests led them to combine state and national calling as one common service with same plan and rates. We know that all these years they have been defined as two different business processes which are now merged in to Process A.
What will happen to assets surrounding Process B? The work force and technology used for that process? They have become redundant, not contributing towards productivity and increasing complexity due to their integration with other business processes.
Business process reengineering is needed here to improve the performance of Process A, reduce dependency on process B, reduce maintenance costs, train the redundant workforce with required skills to support new business processes and contribute towards productivity.